The estimated cost to transfer retiree pension risk to an insurer in a competitive bidding process increased from 100.3 per cent of a plan’s accounting liabilities in March to 100.9 per cent in April, according to Milliman Inc.’s latest pension buyout index. The index uses the FTSE above median AA curve and annuity purchase composite […]
Interest rate levels are critically important to the financial health of defined benefit pension plans. Many DB plans are in their best financial positions in decades, largely due to the dramatic rise in interest rates over the past few years, but decreases in interest rates could pose a major risk for many plans. Changes in […]
A majority (77 per cent) of U.S.-based institutional investors expect interest rates and inflation to remain elevated in 2024, causing problems for risk assessments over the next year, according to a new survey by CoreData. The survey, which polled 100 U.S. institutional investors, found the number of investors concerned about the role of inflation over […]
Nine in 10 (89 per cent) U.S. defined benefit pension plan sponsors say they’re expecting to completely divest their plan liabilities in roughly four years, according to a new survey by MetLife Inc. The survey, which polled 250 DB plan sponsors, found nearly all (94 per cent) said the financial impacts of volatility and related risks […]
Canada’s pension de-risking market saw a record-breaking year in 2022, with $7.8 billion in transferred liabilities and 155 transactions, according to a new report by Eckler Ltd. Mary Kate Archibald, pension principal at the consultancy, says the increase in the total sum for the year wasn’t a surprise due to the interest rate environment. To […]
An increase in the protection limit for defined benefit pension plan members’ assets invested in annuities is making it easier for plan sponsors to de-risk, says Mary Kate Archibald, a principal at Eckler Ltd. Assuris, the not-for-profit organization that protects a portion of retirement benefits from annuities in the event of an insurer’s insolvency, now covers up to $5,000 […]
Institutional investors expect market volatility, high inflation and rising interest rates to spur portfolio de-risking policies over the next two years, according to a new survey by Aeon Investments. The survey, which polled pension plan sponsors, insurers and asset managers with about US$545 in combined assets under management, found 81 per cent said they expect […]
In 2022, the typical defined benefit pension plan achieved an investment return of roughly negative 12 per cent. However, due to dramatic increases in bond yields and a subsequent decrease in pension liabilities, many pension plans ended 2022 with the same — or better — solvency funded level that they had at the beginning of […]
A typical Canadian defined benefit pension plan’s funded position improved on a solvency basis and decreased on an accounting basis in April as a result of the strong performance of domestic equities and decreases in bond yields, according to a new report by Telus Health. During the month, the solvency of the typical Canadian DB […]
Alcoa Corp. is de-risking roughly $315 million (US$235 million) in Canadian defined benefit pension obligations and assets with an annuity transfer. The group annuity contracts will be executed by Industrial Alliance Insurance and Financial Services Inc., which will assume payments for roughly 500 participants in September, according to a press release. Read: Alcoa entering $1BN […]