Society of Actuaries Updates Analysis of Funding Requirements for U.S. Private Sector Single-Employer Defined Benefit Pension Plans

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Feb 18, 2015, 10:00 ET

SCHAUMBURG, Ill., Feb. 18, 2015 /PRNewswire/ -- Today, the Society of Actuaries (SOA) released a report updating projections of contribution requirements for the private sector, single-employer defined benefit system. "The Rising Tide of Pension Contributions Post-2013: How Much and When?" report examines minimum contributions and economic sensitivities under a variety of economic scenarios.

The SOA report revises projections published in 2011 to account for the effects of higher-than-required average corporate plan contributions, two changes in federal pension law, and better-than-expected market performance over the past three years. Under the updated analysis, SOA's projected minimum required contribution levels for private single-employer defined benefit pension plans over the next 10 years (2014-2024) declined by five percent when compared to the 2011 projections. The forecasted average minimum requirement for these plans is now an average $75 billion annually, down from $79 billion in the previous report.

"Despite the reduction in projected minimum required contribution levels between the 2011 and 2015 reports, significant increases in aggregate contribution requirements are still ahead," said SOA Managing Director of Research R. Dale Hall, FSA, CERA, MAAA, CFA.

Dale noted that, in aggregate, employers contributed more than four times the required aggregate amount. These employer contributions coupled with good economic conditions improved the funding outlook for these plans. "Nevertheless, we expect minimum contribution requirements to rise over the long-term under a range of macroeconomic scenarios," said Hall.

The report references how future research with a sensitivity analysis, that includes a range of potential actions by the sponsor community, may help illustrate the effect that decisions could have on future funding of the system, and provide insight to the eventual resolution of future funding requirements.

For more information, a full version of the report, "The Rising Tide of Pension Contributions Post-2013: How Much and When?" is available here.

About the Society of Actuaries

The Society of Actuaries (SOA) is an educational, research and professional organization dedicated to serving the public, its members and its candidates. The SOA's mission is to advance actuarial knowledge and to enhance the ability of actuaries to provide expert advice and relevant solutions for financial, business and societal problems. The SOA's vision is for actuaries to be the leading professionals in the measurement and management of risk.

Contact: Abbie PeGan, 312-729-4265, [email protected]

SOURCE Society of Actuaries