The latest deficit increase was driven primarily by the ongoing financial decline of several large multiemployer plans that are expected to run out of money in the next decade.
Tag: Actuarial issues
Three documents set forth mortality tables to be used by certain DB plans in actuarial assumptions and the procedures to request the use of plan-specific mortality tables instead.
The agency says the additional information would help it with projections regarding its insurance programs.
DB plan sponsors are accelerating funding of their plans and adopting more de-risking strategies, a survey finds.
Putting more into pensions cuts into plan sponsors' operating cash, which should be considered for their DB funding and investment strategies.
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PwC finds some DB plan sponsors are using multiple discount rates, and some have moved to mark-to-market accounting.
They allow the plan to give higher contributions to the owners.
A paper from the American Academy of Actuaries gives examples of which DB plan funding measurements are useful for different plan sponsor situations.
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The IRS’s proposed increases in mortality assumptions will raise PBGC premiums for single-employer pension plans from $8.6 billion to $9.6 billion.
A report contends that not optimizing their contribution recording and timing caused DB plan sponsors to overpay PBGC premiums.
The amendments involve the presentation of net periodic pension cost and net periodic postretirement benefit cost.
A new survey report from S&P Global Ratings examining the pension plans of the 15 largest U.S. cities “reveals some common trends and key factors related to net pension liability per capita and funded ratios.”
Custom yield curves help DB plan sponsors determine an appropriate discount rate to measure liabilities for their pension and other post-retirement benefit obligations, the firm says.
“If interest rates continue to climb, the funded ratio could make some major gains,” says Zorast Wadia, at Milliman.
Funding relief for defined benefit plans is currently scheduled to end in 2020, and plan sponsors could face a spike in contributions.
The board says stakeholders have stated that the current presentation requirement has less value and requires users to incur greater costs in analyzing financial statements.
Based on the Society of Actuaries' preliminary estimates, the new scale may reduce pension plan clients' current liabilities by 1.5% to 2%, depending on the individual characteristics of the plan.