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SEATTLE, Jan. 8, 2021 /PRNewswire/ Milliman, Inc., a premier global consulting and actuarial firm, today released the year-end results of its latest Pension Funding Index (PFI), which analyzes the 100 largest U.S. corporate pension plans. In 2020, corporate pension funding ended down $50 billion for the year, with the funding ratio dropping from 89.8% at the end of 2019 to 88.2% as of December 31, 2020.
Plan assets outperformed expectations, posting an annual return of 11.72% and a gain of $125 billion. But record-low discount rates resulted in plan liabilities increasing as well, by $175 billion during 2020. As of December 31, the Milliman 100 discount rate had fallen 74 basis points, from 3.20% at the end of 2019 to 2.46% a year later.
As indicated below, the Mayor of Providence agrees with this dire analysis.
According to the Comprehensive Annual Financial Report (CAFR) of the City for the fiscal year ended June 30, 2019, the Employee Retirement System of the City (ERS) had a funded ratio of only 25.83%. That is, ERS had approximately $367 million in assets to cover its total $1.4 billion pension liability.GET THE LATEST BREAKING NEWS HERE SIGN UP FOR GOLOCAL FREE DAILY EBLAST
ERS, which secures the retirement of 3,658 retired participants and their beneficiaries, as well as 2,889 active participants, is severely underfunded by more than $1 billion. Since 2014, the pension unfunded liability has grown from $872 million and the funding level has fallen from 29%.
As indicated below, the Mayor of Providence agrees with this dire analysis.
According to the Comprehensive Annual Financial Report (CAFR) of the City for the fiscal year ended June 30, 2019, the Employee Retirement System of the City (ERS) had a funded ratio of only 25.83%. That is, ERS had approximately $367 million in assets to cover its total $1.4 billion pension liability.GET THE LATEST BREAKING NEWS HERE SIGN UP FOR GOLOCAL FREE DAILY EBLAST
ERS, which secures the retirement of 3,658 retired participants and their beneficiaries, as well as 2,889 active participants, is severely underfunded by more than $1 billion. Since 2014, the pension unfunded liability has grown from $872 million and the funding level has fallen from 29%.
Plan Design Decisions Can Reduce Overconcentration in Company Stock
Research from Vanguard supports the continuation of rethinking decisions about company stock offerings in defined contribution plans.
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A recent analysis from Vanguard explores the gradual abandonment of company stock in defined contribution (DC) plans.
In the report, “Company Stock in DC Plans,” authors John A. Lamancusa and Jean A. Young note that at the time the Employee Retirement Income Security Act (ERISA) was adopted, defined benefit (DB) plans were the dominant type of retirement savings plan in America. ERISA imposed a 10% limit on company stock holdings in DB plans; however, no comparable company stock restriction was imposed on DC plans.
Financially Speaking: Year-end tax planning for shareholders of mutual funds & charitable giving troyrecord.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from troyrecord.com Daily Mail and Mail on Sunday newspapers.