Underfunded Pensions Could Spark Wave of ‘Precedent Setting’ Reforms

Jon Market Commentary

Underfunded pensions plans are possibly one of the most significant headwinds facing companies and public-sector bodies today.
Despite record high stock markets and a bond bull market that has lasted for many decades, corporate pension plans are still chronically underfunded as fees and poor investment performance have eroded gains. Furthermore, pension trustees have struggled to keep up with funding requirements for over-generous schemes.
Underfunded Pensions Spur Borrowing
According to an analysis by Willis Towers Watson at the beginning of this year, pension plan data for 410 of the Fortune 1000 companies with a defined-benefit pension plan, had an aggregate pension funded status of 80% at the end of 2016. The average pension deficit is $325 billion, up from $308 billion at the end of 2015.

This post was published at FinancialSense on 08/21/2017.