Products April 24, 2018

MassMutual Offers New Reports to Help DB Plan Sponsors

The report is being generated by MassMutual’s Defined Benefit actuarial and investment consultants with the goal of helping sponsors maintain an integrated actuarial and investment policy to manage their plan.

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Massachusetts Mutual Life Insurance Co. (MassMutual) is introducing a new quarterly market update and commentary about economic and regulatory conditions and their impact on managing pension obligations.

MassMutual’s Defined Benefit Market Update and Commentary is designed to support its DB plan sponsor clients and potential clients in the ongoing management of their plans. The quarterly report includes data on interest rates, bond and equity markets, and commentary on economic and regulatory matters to help sponsors make informed decisions.

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“Movements in interest rates, regulatory changes in the pension space, and the performance of the asset markets have a deep impact on the risk and performance of pension plans,” says Sumit Kundu, Director and Pension Consulting Actuary at MassMutual’s Institutional Solutions unit. “In tracking the funded status of their plan, plan sponsors are particularly concerned with issues that impact contribution requirements, risk and volatility.”

The tracking report is being generated by MassMutual’s Defined Benefit actuarial and investment consultants with the goal of helping sponsors maintain an integrated actuarial and investment policy to manage their plan. MassMutual’s pension consultants then help plan sponsors to review the data and examine implications on individual plans.

The Update and Commentary is designed to be a quarterly snapshot of the economic environment and its implications for pension plans:

  • Providing updates of recent market returns and trends, movements in interest rates and the impact on pension funding rates and accounting discount rates;
  • Assessing the potential impact of the economy on pensions, including active, closed or frozen, and the impact of volatility on asset returns;
  • Reviewing specific plan’s current asset allocations in collaboration with the plan’s actuarial and investment consultants with the goal of reducing volatility on funding status;
  • Reporting recent movements in the pension accounting discount curve for both MassMutual’s own yield curve as well as the Citigroup Pension Discount Curve for sample pension plans; and
  • Tracking interest rate trends.
The inaugural report is here.
The Markets April 24, 2018

AFT Encourages Action on Gun Manufacturer Investments

The report identifies asset managers and several states’ public pension systems as institutions that have all taken action regarding gun manufacturer investments.

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The American Federation of Teachers (AFT) released a special edition of its “Ranking Asset Managers” report, which creates a watch list of investment managers that invest millions of dollars in companies that make assault weapons.

“Educators, parents and students need safe and welcoming schools, and educators have a right to assume their deferred wages are not being invested in the companies that make the military-style assault weapons used to injure and kill them and their students in countless school shootings,” says AFT President Randi Weingarten. “When companies produce a dangerous product that creates a national public health and safety crisis, that company becomes a high-risk investment and people have the right to know. This report is about exposing that risk and providing pension trustees and investment managers with the tools they need to demand meaningful action.”

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The report highlights actions several pension funds have taken to reduce their risk exposure. It also calls on all investors to “use their power to compel those gun manufacturers to take meaningful action to address these risks.” It creates a list of specific steps pension funds and financial institutions can take to mitigate their risks, including signing a gun safety code of conduct and limiting—or putting stricter stipulations on—their relationships with gun manufacturers.

The report identifies asset managers and several states’ public pension systems as institutions that have all taken steps toward this goal, and it names other financial institutions and public pension systems that have not yet acted in response to the gun violence epidemic.

In March, a bill was filed with the Massachusetts Legislature that would require the state’s public pension fund to divest from companies that manufacture guns and ammunition. In April, BlackRock issued a statement about its approach to firearm manufacturers.

The AFT report is here. It is being sent to pension plan trustees.

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