P-Solve Monthly Retirement Update October 2015

Transcription

1 What Happened in? Market Returns Interest Rates The discount rate on the Citigroup Pension Liability Index (CPLI) fell 1 bp from 4.32% to 4.31%. Treasury rates rose at all points along the curve. General Economy The October US unemployment rate fell to 5.0%. Non-farm payroll employment rose by 271,000. Manufacturing activity declined in October with the ISM Composite Index falling from 50.2 in September to 50.1 in October. CPI for September remained flat year over year while core inflation (excluding food and energy) rose 1 bp from 1.8% to 1.9%. The advanced estimate of Q real GDP showed that the economy grew by 1.5%.

2 Market Summary - Total Returns through P-Solve Monthly Retirement Update 1-Month Year to Date 1-Year S&P % 2.70% 5.20% Russell % 2.43% 4.86% Russell Value 7.55% -2.09% 0.53% Russell Growth 8.61% 6.94% 9.18% Russell % -2.53% 0.34% Russell Value 5.60% -5.02% -2.88% Russell Growth 5.67% -0.10% 3.53% Russell % 2.02% 4.49% Russell Value 7.39% -2.33% 0.24% Russell Growth 8.39% 6.36% 8.71% MSCI EAFE 7.82% 2.52% 0.35% MSCI ACWI (net) 7.85% 0.25% -0.04% MSCI EM 7.14% -9.16% % Barclays U.S. Aggregate 0.02% 1.14% 1.96% Barclays U.S. Long Credit 1.00% -2.96% -0.94% Barclays U.S. Credit 0.47% 0.21% 0.90% Barclays U.S. Government -0.35% 1.43% 2.36%

3 Penbridge Pension Risk Transfer Index About Penbridge Advisors P-Solve Monthly Retirement Update 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 or call 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. September % 3.07% 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. PPA Ryan Labs, FAS 158 Liability Index (Funding) Liability Index (Accounting) Quarter through 0.85% -0.10% Year to Date -1.54% -3.21% 1-Year 0.54% 1.97% 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 or call

4 Key Interest Rates for DB Plans For current and historical rates, visit

5 For current and historical rates, visit

6 For current and historical rates, visit

7 Upcoming Regulatory Due Dates = December 1 (DC): The special notice (to participants) of intent to use a safe-harbor formula for calendar year 2015 plans is due. = December 1 (DC): Automatic enrollment notice due = December 1 (DC): Qualified Default Investment notice due = December 15 (DC): Due date for the Summary Annual Report (SAR) for plan year 2014 (for calendar year plans that were granted an extension of time to file the Form 5500). = December 31 (DB): Deadline for certifying AFTAP for plans which previously issued a range certification for 2015 = December 31 (DB): Deadline for electing to reduce credit balance, or to revoke a previous election to apply credit balance (if allowable)