2013 was a great year for defined benefit (DB) plans. A recent report by Mercer said that pension plans of the S&P 1500 companies are now 95% funded, up from 74% a year ago. Fueled by record high stock market levels, strong contributions by plan sponsors and modest increases in interest rates, sponsors of defined benefit plans are finding themselves in a much better position when looking at the funding of their DB plan.
While that’s great news for DB plans, it’s important that plan sponsors don’t become complacent. It wasn’t long ago that funding levels dipped to historic lows.
My recommendation to plan sponsors of DB plans right now? Be an elephant! Don’t forget about the risks a DB plan can have on your organization.
Be an elephant with your defined benefit plan – don’t forget.
You may already know this, but because Santa Claus only works for one night a year, he occupies the rest of his time with detailed statistical analysis. That’s why he keeps detailed lists of all the “naughty” and “nice” children. It is, however, little known that Santa Claus also keeps various sub-lists for his statistical analyses. One of these lists is his Economic Naughty and Nice List. To get on Santa’s Economic Nice List, the subject must be achieving positive results for the economy. Santa’s Economic Naughty List contains those who, through action or inaction, do their economies harm. I happen to have seen a leaked portion of the list (Wikileaks again!) and wanted to share here. Read more