Infographic: Corporate Pension Derisking - Towers Watson
Upcoming SlideShare
Loading in...5
×
 

Infographic: Corporate Pension Derisking - Towers Watson

on

  • 189 views

Improved funding levels offer DB plan sponsors opportunities to reduce pension risk.

Improved funding levels offer DB plan sponsors opportunities to reduce pension risk.

Statistics

Views

Total Views
189
Views on SlideShare
189
Embed Views
0

Actions

Likes
0
Downloads
1
Comments
0

0 Embeds 0

No embeds

Accessibility

Categories

Upload Details

Uploaded via as Adobe PDF

Usage Rights

© All Rights Reserved

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Processing…
Post Comment
Edit your comment

Infographic: Corporate Pension Derisking - Towers Watson Infographic: Corporate Pension Derisking - Towers Watson Document Transcript

  • Solutions Start Here Improved capital markets, higher interest rates and funded status increases are opening new doors for some sponsors. While each organization’s needs are unique, the benefits of preparation and planning are universal. Start by asking the following questions: Does my organization have a journey plan? If not, should we take steps to develop one? Should we reexamine our funding policy? Should we reconsider our asset allocation strategy? Have we modeled lump sum settlements and annuity purchases? Want to learn more? Contact your local Towers Watson consultant, or visit towerswatson.com. Source: Towers Watson/Institutional Investor 2013 U.S. Pension Risk Management Survey. References to funded status estimates are as of 12/31/13, and are based on the 418 Fortune 1000 companies that sponsor U.S. tax-qualified defined benefit pension plans and have a December fiscal-year-end date. Many Plan Sponsors Are Already Taking Action Settlements Plan sponsors are engaging in an unprecedented amount of settlement activities. Liability Management Investment strategies focused on movements in asset values mirroring movements in liabilities are becoming more prevalent. 7in 10companies expect to have implemented a liability-driven investment strategy by 2015. Journey Plans More senior finance executives report they are using a journey plan or de-risking road map to manage pension risk. DB sponsors still prioritize managing risk over gaining returns and concerns about the bottom line are driving decision making. 51%of sponsors report that the impact of the DB plan on financial statements is the basis for determining funding policy. Pension De-Risking: It’s Time to Rethink Your Options Improved Funding Environment Presents De-Risking Opportunities At the end of last year, the funded status of corporate pension plans had the highest annual increase in more than 15 years, due largely to the strong stock market and higher interest rates. 2013 plan funding estimates jumped to the highest levels since before the 2008 financial crisis. Aggregate funding levels 77% 93% 20132012 The largest increase in more than 15years The improved funding levels offer DB plan sponsors opportunities to reduce pension risk. But more Pension Benefit Guaranty Corporation (PBGC) premium increases are on the way. The time to act is now. 58% of sponsors have offered or expect to offer lump sums. 50% of sponsors plan to settle some or all liabilities in the future. 2015