Pensions & Investments Special Report: Corporate Balance Sheet

Defined benefit funding rises even as returns turn negative

June 6, 2019

By Trilbe Wynne

Rise in the discount rate offsets late-year market plunge for corporate plans

A higher average discount rate lowered liabilities for the 100 largest U.S. corporate defined benefit plans in 2018, but that funding advantage was mostly offset by negative returns for plans with a reporting date of December 31, Pensions & Investments annual analysis of Securities and Exchange Commission filings show.

Royce Kosoff headshot

No end in sight:

Royce Kosoff, Willis Towers Watson managing director of retirement thinks the economic landscape is good for defined benefit risk transfer activity and he doesn’t see it slowing anytime soon.

"We’re in a period where we’re going to see a broad spectrum of actions from plan sponsors.”

Mr. Kosoff said risk management strategies, particularly risk transfer transactions, were a continuing trend. “As the economics tend to work for both the plan sponsor and the insurance company, we expect pension risk transfer to be vibrant well into 2019,” he said.

Learn more in this article, published by Pensions & Investments.

This article is reproduced with permission of Pensions & Investments.