Pension news roundup: Church Pension Group, IRS, Mercer, NIRS, PBGC

Here’s recent pension news and announcements from the world of defined benefits retirement plans.

Pension Benefit Guaranty Corporation (PBGC) is accepting nominations for its advisory committee. Nominations must be received on or before December 16, 2021.

OctoberThree Consulting reports, “Pension finances gained ground in October, as resilient stock markets more than offset the impact of declining interest rates. Both model plans we track improved last month: Plan A gained 2% in October and is now ahead more than 11% for the year, while the more conservative Plan B gained 1% last month and is now 3% up through the first ten months of 2021.”

Northern Trust’s Northern Trust Canada universe tracking reports that Canadian pension plan returns were marginally positive during the third quarter as global equity markets softened following a decline in September. Issues in China, the threat of rising inflation, slowing economic growth, the unwinding of central bank support and the looming U.S. government debt ceiling prompted volatility and global equity markets closed the quarter with mixed results. The median Canadian Pension Plan returned 0.6% for the quarter ending September 30, with a year-to-date return of 4.8%. “The third quarter served as a reminder of how quickly volatility can ripple across financial markets and the resulting impact to pension plan returns,” said Katie Pries, President and CEO of Northern Trust Canada.

NEPC announced the key trends from its benchmark Defined Benefit Plan Trends Survey, which examines historical trends and health of corporate and healthcare pensions. The results, to be released in January 2022, highlight three significant trends over the past decade: 1) Pension funded status has improved dramatically. 2) Plan sponsors have increased their LDI allocations. 3) Shifting asset allocations coupled with the strong market environment materially reduced expected return on assets. 

The National Institute on Retirement Security is sponsoring a webinar, “Longevity Rates for Pension Plan Participants,” on Wed., Nov 17, 2021 2:00 PM – 3:00 PM EST. It covers new research that examines the differences in life expectancy between defined benefit pension pension plan participants and the U.S. population as a whole. 

Legal & General Retirement America, a provider of pension risk solutions in the U.S., released its third quarter Pension Risk Transfer (PRT) Monitor, which examines PRT transaction volume in the U.S. It estimates more than $16 billion in sales occurred over the past three months. Third quarter transaction volume was nearly twice the combined $8.8 billion recorded during the first two quarters of 2021. “The economy is slowly but surely recovering from the pandemic and as a result deal volumes and deal sizes should follow suit,” said George Palms, LGRA President. “We’ve seen five jumbo deals of more than $1 billion this year alone, reflecting the fact that plan sponsors are becoming more comfortable with PRT as a tool to manage their pension risk.”

Mercer reports that the estimated aggregate funding level of pension plans sponsored by S&P 1500 companies increased by 1 percent in October 2021 to 95 percent. “While interest rates decreased slightly, October was a very strong month for equities after the pullback we saw in September,” said Matt McDaniel, Mercer’s US Financial Strategy Group Leader. “However, with on-going labor force participation concerns, inflation uncertainty and disruptions to the global supply chain, there are a myriad of factors that could lead to continued volatility in the markets as we near the end of 2021.”

The IRS issued two new FAQs offering guidance to public and private employers who sponsor pension plans and want to encourage retirees to return to the workforce. The FAQs highlight existing ways that employers can meet their employment objectives and still comply with the plan qualification rules. 

The Church Pension Group (CPG), a financial services organization that serves The Episcopal Church, has released its 2020 Episcopal Clergy Compensation Report. The interactive report offers an in-depth look at demographic and geographic differences in clergy compensation across The Episcopal Church. 

The Center for Board Certified Fiduciaries (CBCF) is affiliating with the School of Professional Studies at Wake Forest University to provide the industry’s first executive education certificate in fiduciary studies. Courses will be taught by faculty from both CBCF and Wake Forest.

CAiP: Investment Strategies for Canadian Pensions is offering several upcoming virtual events for pension professionals. Coming up on Wed., Nov. 10, 2021, a virtual event on Real Assets –   pension fund executives and leading asset managers will provide an economic and geopolitical outlook, examine the opportunities in industrial real estate, and share insights on how they are using real asset investments to construct a portfolio. [CAiP is a unit of ALM Media, as is BenefitsPRO.com.]