Us Pension Funding Ratios Plummet in Second Quarter; Third Largest Decline in 20 Years ; Lgima Launches Pension Tracker to Show Fund Health
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Summary
CHICAGO, July 6 /PRNewswire/ -- Legal & General Investment Management America (LGIMA) announced today that its inaugural Pension Fiscal Fitness Monitor, a quarterly estimate of the overall health of a typical US defined benefit pension plan, found that pension ratios dropped 15 percent in the second quarter of 2010. The drop was the third largest decline in the last 20 years.
The Pension Fiscal Fitness Monitor showed the decline in funding ratios came from a mixture of equity market losses, and lower bond yields. A sell-off in risky assets drove global equity markets lower - the S&P was down 11 percent - leading the average pension investment strategy to drop 6 percent for the quarter. At the same time, the flight-to-quality drove high quality bond prices up and yields lower. This fall in yields resulted in pension discount rates falling 50 basis points from 6.1 to 5.6 percent, increasing the present value of a typical pension liability profile by approximately 10 percent.See the full content of this document
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Us Pension Funding Ratios Plummet in Second Quarter; Third Largest Decline in 20 Years ; Lgima Launches Pension Tracker to Show Fund Health
LGIMA's Head of US Pension Solutions, Aaron Meder s...
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