In much of the western world, DB plans are on the endangered list. In some countries, such as Australia, these plans are virtually extinct.
American institutional investors lost 1.5% in the second quarter, reports Northern Trust, based on data assessing the approximately 300 plans in its Northern Trust Universe.
The funded status of the typical U.S. corporate pension plan hit a record low in July, according to reports from BNY Mellon and Mercer.
In the simplest of terms, they all use discretionary investment managers to make financial decisions on their behalf. No one from the CPP has ever called you to find out how you’d like your contributions invested. Likewise for any DB plan member. Those retirement plans rely on portfolio managers to do that.
People don’t consciously control a lot of their behaviour. For plan sponsors, this is frustrating, because getting employees engaged in benefits and retirement plans is all about behaviour change.
Coverage of the Benefits Canada Benefits and Pensions Summit.
In a world where markets turn on a dime, the underlying economic fundamentals are often shoved to the side. “Diamonds are forever,” noted Avery Shenfeld, senior economist with CIBC World Markets, in an economist panel at the Benefits Canada Benefits & Pension Summit. “But when it comes to global economies, nothing else is really forever.”
It’s more bad news for Canadian pension plans. Yesterday, Mercer and Towers Watson both released their figures regarding DB plan funding in the second quarter of 2012—and both were looking pretty gloomy.
It was a difficult few months in the second quarter of 2012 for Canadian pension plans, according to reports released today by both Mercer and Towers Watson. Mercer’s Pension Health Index stands at 77% as of June 30, down 5% over the quarter. And Towers Watson’s DB Pension Index fell 1.4%.
After stronger market performances in 2009 and 2010, returns took a turn for the worse in 2011. The TSX declined by 11%, and lower interest rates increased pension liabilities.