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Late-year volatility erases earlier 2018 gains for corporate DB plans

4 trends in pension risk transfer and liability-driven investment strategies for the year ahead.

Robust voluntary contributions, made as sponsors sought to write them off against the previous corporate tax rate and before rising rates to the Pension Benefit Guaranty Corp. variable premiums set in, masked what would have an even worse fourth quarter for pensions. (Photo: Shutterstock)

The average funded status for corporate defined benefit retirement plans peaked at 91 percent by the end of September last year, bolstered by strong year-to-date gains in equity markets and a wave of employers’ voluntary contributions in light of cuts to corporate tax rates.

That marked a 5 percent increase in plans’ funded status from the end of 2017, a 10 percent increase since 2016, and the highest level of pension funding seen since the financial crisis, according to a report from Goldman Sachs Asset Management.

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Nick Thornton

Nick Thornton

Nick Thornton is a financial writer covering retirement and health care issues for BenefitsPRO and ALM Media. He greatly enjoys learning from the vast minds in the legal, academic, advisory and money management communities when covering the retirement space. He's also written on international marketing trends, financial institution risk management, defense and energy issues, the restaurant industry in New York City, surfing, cigars, rum, travel, and fishing. When not writing, he's pushing into some land or water.

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