What Happened in March 2017?
- The discount rate on the Citigroup Pension Liability Index (CPLI) rose from 4.04% to 4.12%.
- In aggregate, short rates rose and long rates were flat to moderately lower, primarily driven by the Fed’s decision to raise interest rates.
- The March US unemployment rate fell to 4.5% from 4.7%.
- Non-farm payroll employment rose by 98,000.
- Manufacturing activity decreased in March, with the ISM Composite Index falling from 57.7 in February to 57.2 in March.
- CPI for February was 2.7% year-over-year while core inflation (excluding food and energy) was 2.2%.
- The third and final estimate of Q4 2016 real GDP showed that the economy grew by 2.1%, while the advanced and second estimates both showed that the economy grew by 1.9%.
Market Summary – Total Returns through March 2017
Penbridge Pension Risk Transfer Index
About Penbridge Advisors
Penbridge Advisors provides pension plans with unbiased information and advisory services on the U.S. pension risk transfer (PRT) market and products. Penbridge provides pension plans with free access to the industry’s only database covering PRT products and providers. The firm possesses the expertise to compare the financial implications of plan termination versus plan maintenance, and to inform the process and timing of potential PRT transactions. For more information on Penbridge, please visit penbridgeadvisors.com or call 203-564-1529.
About Penbridge PRT Index
Sponsored by Penbridge Advisors, the Penbridge PRT Index represents the premium that an insurance provider would charge for a buy-out of a “typical” defined benefit plan. It is intended to illustrate relatively advantageous or disadvantageous times for a corporate plan sponsor to purchase annuities from insurance providers.
Ryan Labs Index
The return on assets in a pension trust is clearly a key driver of the funded status of a pension plan. However, pension liability values can also fluctuate significantly with changes in market interest rates. In essence, pension liabilities carry their own market returns. Plan sponsors should therefore focus on the net impact of changes in assets and liabilities on a plan’s funded status. The following table provides the estimated return on pension plan liabilities as of the end of last month as calculated by Ryan Labs, Inc. (used with permission):
Ryan Labs, Inc. Asset Management specializes in managing custom fixed income portfolios for pension plans and institutional clients. For more information on Ryan Labs, please visit ryanlabs.com or call 800-321-2301.
Key Interest Rates for DB Plans
Upcoming Regulatory Due Dates
- April 30 (DB): 2016 plan year annual funding notices to participants are due (calendar year plans)