|[January 30, 2017]
Sibson and Segal Marco Advisors' Pension Funding Tracker Shows Fourth Quarter Rebound
Rising interest rates contributed
to a fourth-quarter rebound in pension funding levels for the
single-employer defined benefit plan tracked by Sibson Consulting and
Segal Marco Advisors, and ended the year at roughly the same funding
level as when 2016 began.
The funded status of the model plan examined in each quarterly issue of Prism
began the year at 83 percent, but fell to a 2016 low of 76 percent in
the second quarter before shooting back up to 82 percent in the fourth
due to a 7 percent liability decrease and a 2 percent decline in assets.
"On the one hand, one can conclude that 'nothing happened' in 2016 - but
this is not at all true when one looks at the quarter-by-quarter
movement of the funded status," commented Stewart Lawrence,
National Retirement Practice Leader. "A quarter-by-quarter view shows
plans' exposure to the uncompensated risks of interest-rate movements."
"Going forward," Mr. Lawrence added, "the significant volatility in
funded status in the recent past, underscored by exposure to the
precipitous drop and sbsequent rise of interest rates this year,
highlights the importance of examining risk-mitigation strategies,
especially relating to the uncompensated risk of interest-rate
To speak with Mr. Lawrence about Prism, and how it may inform
plan sponsors' decision-making, contact Todd Kohlhepp.
Sibson Consulting (www.sibson.com),
a member of The
Segal Group, provides strategic human resources solutions to
corporate and non-profit employers and professional service firms.
Sibson's services include benefits, compensation, human capital
management and change management consulting.
Segal Marco Advisors (www.segalmarco.com),
a member of The
Segal Group, is a leading investment consulting and solutions firm
that provides innovative, client-driven consulting advice, outsourcing
solutions, proxy voting and corporate governance. Clients include joint
boards of trustees administering benefit plans under the Taft-Hartley
Act, state and local governments, corporations, non-profit
organizations, endowments and foundations. The firm works with financial
services firms through Rogerscasey, a Division of Segal Advisors, and
with Canadian clients through Segal Rogerscasey Canada. The firm is also
a founding member of the Global Investment Research Alliance.
View source version on businesswire.com: http://www.businesswire.com/news/home/20170130006131/en/
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