Q4 2016 Pension Plan Experience

Rising interest rates contributed to a fourth-quarter 2016 rebound in pension funding levels, according to the latest issue of Prism.

Prism examines the effect of changes in the assets and liabilities of a model single-employer private-sector defined benefit plan on its funded ratio over the four latest quarters.

In this issue, you’ll learn:

  • What aspects of fourth-quarter investment performance contributed to the 2 percent asset decline for the Prism model pension plan;
  • How changes in the yield curve during the fourth quarter decreased the model plan’s liability by about 7 percent;
  • The impact of these changes on the model plan’s funded status; and

How deterministic and asset-liability stochastic modeling can help you measure the risks to your own plan stemming from recent changes in its assets, liabilities and funded ratio.


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