Clark and McDermed seek to document and explain the growth of private defined contribution plans; the enactment of federal legislation; and pension sponsor
motivation and pension design choice.
In particular, the results suggest that, after the release of 2001 financial results (in May 2002 for most of the sample and November 2001 for the remainder), the shares of more than one-tenth of pension sponsors
were at least 20 percent overvalued, and that of the average pension sponsor
was about 10 percent overvalued.
Similarly, in my view, it's not enough for a pension sponsor
to pay a consultant five or 10 basis points to manage a GIC portfolio.
are expected to contribute to their plans in 2018 in order to qualify for tax deductions before the new lower rate of 21 percent comes into effect in mid-September.
Defined benefit (DB) pension sponsors
have been motivated to shift portfolio allocations, most notably de-risking through scaling back traditional equities, with a corresponding increase to lower-volatility fixed income.
and trustees would have to change scheme designs and operations.
However, some think there are too few corporate pension sponsors
ready to make this trade-off.
"In these instances, the benefits of annuitization may outweigh the costs involved, especially for frozen pension sponsors
focused on exiting the pension liabilities efficiently," Dinunzio said.
In the past few years, pension sponsors
have been spending more time on overall pension strategy, rather than making changes to their plans, he says.
uncovered disquieting information about the current funding status of pension plans ("U.S.
An analysis in March by Watson Wyatt indicates that the aggregate funding of the loo largest pension sponsors
in the United States fell by $303 billion in 2008, a 30% decline from the prior year.