Understandably, the search for higher yields has become a higher priority, even for fully funded pension plans
. When unfunded liabilities (which represent the assets that pension funds will have to purchase in the future to meet their obligations) are included, the magnitudes soar even higher.
While the remeasurement generated a mark-to-market loss for accounting purposes, the company's funded pension plans
remain fully funded as a result of the company's de-risking strategy.
In developed market economies the reforms promote voluntary funded pension plans
. In some emerging market economies this institutional arrangement has been developed "green field" and, additionally, mandatory pension funding was introduced, not without persuasion of the World Bank (Sarfati & Ghellab, 2012).
Most countries nowadays benchmark their pension systems against a standard three-pillar system (as also proposed by the World Bank for developing and emerging economies): a basic state-provided pension pillar with the goal of poverty reduction, a second (often funded) pillar comprising employer co-sponsored pensions and a third pension pillar comprising voluntary privately funded pension plans
promoting a stronger relation between earnings and pensions (as the rich can contribute more to their private accounts).
Companies with fully funded pension plans
resent having to essentially overpay premiums in order to cover the mistakes made by bankrupt companies, whose legacy pension costs they are forced to cover to some extent.
sponsors had fully funded pension plans
. In 2012, only five companies in this group were fully funded.
According to the Pew study, in 2000 just more than half the states had fully funded pension plans
. By 2008, only four states could claim that success: Florida, New York, Washington, and Wisconsin.
In the past, the formulae that determined the range of annual contributions an employer could or must contribute to a pension plan were subjective, highly volatile and ultimately failed to provide for safely funded pension plans
. Prior to adoption of the act, the funding target mandated by law was 90 percent of a plan's predicted financial needs.
Ottawa--Four in five Canadians are uncertain about the future of their private and employer funded pension plans
and believe that their plans are in crisis because of underfunding, according to a Conference Board of Canada survey.
The percentage of fully funded pension plans
with over 1,000 members lowered from 84 percent in 1998 to 37 percent in 2002.
It is worthwhile to lay out the minimum preconditions of financial sector development for the success of pension reform and the promotion of funded pension plans
, as well as those for allowing the pension funds to realise their potential impact on capital market development in turn.
The author fears that if the system is not reformed, taxpayers ultimately may have to provide PBGC with the money needed to cover the liabilities of poorly funded pension plans
. The author notes that when the PBGC was established, a private pension insurance market did not exist, partly because potential insurers lacked sufficient information on actuarial risks.