Each year, we perform a comprehensive review of defined benefit (DB) pension plans of every company in the S&P 500 and provide initial impressions on the issues and factors impacting corporate DB plan sponsors. We are pleased to share our 17th annual pension review, “First Take:” Groundhog Day, based on our initial analysis of the 50 largest US DB plans in the S&P 500 by asset size. Our title this year references the classic 1993 movie Groundhog Day, in which the same day repeats itself over and over again; this feels very similar to what happened to US corporate DB plans in 2018. We invite you to access the report, where we outline key findings from our analysis and several trends that are impacting the pension landscape, including the following:
Despite hitting 10-year highs in funding levels intra-year, volatility erased nearly all these gains in 4Q’18.
Actual allocations to fixed income moved higher in 2018, although lack of rebalancing at the end of the year may have played a role.
Aggregate funded status for the S&P 500 universe fell notably over the 10-year period ending in 2017, despite contributions greatly exceeding new benefit accruals. If sponsors do not adjust their strategies, should they expect different results?
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