Model Pension Tracker by Sibson Consulting Reveals Funded Status Increase in Q1 2019

NEW YORK (5/3/19) — 

Simulated Pension Demonstrates Sound Long-Term Strategy for Managing Risk

The funded status of the model pension plan examined by Sibson Consulting and Segal Marco Advisors rose to 89 percent in the first quarter of 2019, increasing by 2 percentage points since the previous quarter, as illustrated by red line in the accompanying graph. This increase in funded status is a result of a 9 percent asset gain and a 6 percent increase in liabilities.

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“For the first time in seven years, global stocks had double-digit returns. U.S. stocks were the best performers, rounding out the quarter at 14 percent,” said David Palmerino, vice president with Segal Marco Advisors. “U.S. stocks had their best quarter in almost 10 years and developed international stocks had their best quarter in more than 5 years, which helped contribute to the increase in asset value.”

National Retirement Practice Leader Stewart Lawrence recommends that plan sponsors examine their defined benefit (DB) plans for both accounting and funding metrics: “Mitigating the financial volatility of a pension plan is top of mind for plan sponsors now more than ever due to the uncertain future of the economy,” he said. “Plan sponsors should consider asset-liability modeling capabilities to helpenhance risk mitigation.”

To speak with one of our consultants about the model plan, and how it may inform decision-making for pension plans, please contact Amira Rubin.

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Sibson Consulting, a member of The Segal Group, provides trusted advice that improves lives. Sibson delivers strategic human resources solutions to corporate, higher education and non-profit employers. Sibson's services include benefits, compensation, human capital management and change management consulting.

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