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2016 Pension Review "First Take:" On the Move

Listen to Michael Moran, CFA, Senior Pension Strategist, Goldman Sachs Asset Management, as he provides insights on key pension trends from our 15th annual Pension Review First Take.
 


 

Pension Trends in Transition


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. In this year’s Pension Review “First Take:” On the Move, we outline key findings from our analysis and several transitions that are impacting the pension landscape, including the following:

Funded Level Reaching Inflection Point?

Corporate DB funded levels may be on the move as interest rates and equity values rise simultaneously.

Source: Goldman Sachs Asset Management; company reports; analysis based upon the US plans (when specified) of S&P 500 companies; as of February 2017; for illustrative purposes only. The 2016 and 2017 figures are preliminary and estimated, respectively, and are subject to potentially significant revisions over time.

Asset Allocations Continue to Shift

Some plan sponsors are increasing their fixed income allocations despite the low funded status and interest rate environment.

Source: Goldman Sachs Asset Management; company reports; analysis based upon the US plans (when specified) of S&P 500 companies. Views and opinions expressed are for informational purposes only and do not constitute a recommendation by GSAM to buy, sell, or hold any security. Views and opinions are current as of the date of this presentation and may be subject to change, they should not be construed as investment advice. The 2016 figures are preliminary and are subject to potentially significant revisions over time. All data as of the year indicated.

Pension Contribution Activity on the Rise

Voluntary contribution activity picked up in 2016, and may continue into 2017, given rising PBGC variable-rate premiums.

*Sizable contributions by General Motors in 2003 ($18bn) and AT&T in 2013 ($9.4bn) upwardly skewed total S&P 500 contributions for those years.
Source: Goldman Sachs Asset Management; company reports; analysis based upon the US plans (when specified) of S&P 500 companies. The 2016 and 2017 figures are preliminary and estimated, respectively, and are subject to potentially significant revisions over time.

Background on the First Take


Each year, we perform a comprehensive review of the DB pension plans of every company in the S&P 500 based on the information they file in their annual 10-K reports with the Securities and Exchange Commission.  As in previous years, we have focused our initial analysis in our “First Take” report on the 50 companies in the S&P 500 with the largest US DB plans by asset values based. The goal of this “First Take” review is to provide initial impressions on the issues and factors impacting corporate DB plan sponsors.

2016 Pension Review “First Take:” On the Move

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