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.
As all these considerations suggest, pension sponsors
have plenty to think about when they begin looking at investing from a total risk framework.
It takes as given that the government will always have an important role as standards setter, as monitor, and as the entity that mandates that pension sponsors
insure their pension obligations.
The PSTA boosts funding requirements for single-employer defined benefit pension plans; creates new roles for multi-employer plans; provides the airline industry and financially troubled plans with special provisions to avoid plan terminations; and enhances financial disclosure requirements for pension sponsors