PBI’s article “Investment Policy Changes Sustain Pensions” was published in the December 2012 issue of Benefits and Pension Monitor.
A decade of falling bond yields and volatile equity returns has led to volatility in funded ratios (market value of plan assets over plan liabilities) along with sharp increases in contributions for pension plans using traditional investment policies which depend on strong and stable equity returns to achieve the funding objectives.
Pension plans with a 60/40 mix have had very volatile funded ratios and many now have large deficits to deal with.
Pension fiduciaries are aware of the issues, but few have made the investment policy changes required to adapt…
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