New York (8/21/18) —
The funded status of the model pension plan examined by Sibson Consulting and Segal Marco Advisors rose again by 2 percentage points to 93 percent in the second quarter of 2018, as illustrated in the graph below. The funding increase is a result of a flat asset return combined with a 3 percent decrease in liabilities. The decrease in liabilities was due to an increase in high-quality corporate yields.
“Domestic stocks were the lone bright spot, posting positive returns each month of Q2, and outperforming developed international stocks and emerging market stocks,” said David Palmerino, vice president with Segal Marco Advisors. He added, “FOMC increased the target range for the Federal Funds Rate to 2 percent, its second increase this year, but the move was largely telegraphed and had no dramatic impact on bond prices.”
National Retirement Practice Leader Stewart Lawrence advised, .“As employers reconsider their strategies and tactics for 2018, this might be an appropriate time to raise the issue of examining their plans’ evolving risk-mitigation strategy.”
To speak with one of our consultants about the model plan, and how it may inform decision-making for employers that have a pension plan, please contact Erin Burns.
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Sibson Consulting (www.sibson.com), is another 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.
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