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Aon Hewitt Retirement and Investment Blog

A Rising Tide in the US Pension Risk Transfer Marketplace

This blog entry discusses 2016 U.S pension risk transfer market activity, which has been steadily growing since 2012, when landmark transactions executed by General Motors and Verizon helped cultivate the marketplace.

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US Corporate Pensions Year in Review: 2016 Trends and 2017 Opportunities

US Corporate Pensions Year in Review: 2016 Trends and 2017 Opportunities

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Windblown Voyage: Expected Returns in Volatile Markets

Aon Hewitt advises thousands of clients across the globe on setting assumptions for expected returns. This blog addresses the in-house model used to perform this analysis, the inputs used, and the importance of revising the assumptions on a quarterly basis.

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Potential U.S. Corporate Tax Reform Presents Prefunding Opportunity in 2016

U.S. plan sponsors may wish to make additional contributions to fund retirement plan obligations to maximize deductions, should the Trump administration lower the corporate tax rate in 2017 and beyond.

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Life Expectancy Assumptions for Pension Plans – More Volatility Ahead?

The Society of Actuaries recently indicated that it expects to issue an updated set of life expectancy assumptions for U.S. pension plans in the private sector in late October 2016. Based on an Aon Hewitt analysis of new data released by the U.S. Social Security Administration, the updated assumptions likely will show lower projected improvements in life expectancy than the previous assumptions.

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Brexit Implications for U.S. Pension Plans with Dynamic Investment Policies

Aon Hewitt’s Pension Risk Tracker tracks the daily funded status for S&P 500 companies with defined benefit pension plans; the rally in U.S. Treasuries year to date has resulted in a meaningful decline in funded status for most U.S. corporate pension plans – U.S. Treasuries have rallied further following Brexit. This could have implications for the investment strategies of many plan sponsors.

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Application of the Spot Rate Approach to US Pension Expense Calculations – An Investment Perspective

What is the Spot Rate Approach? Since 2015, many companies using U.S. GAAP accounting have disclosed a change to a “spot rate” approach for determining the service cost and interest cost components of their pension expense. This article examines the pension accounting model through an investment lens to help clarify the application of this new approach.  

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Is It Time to Reconsider the Funding Strategy for U.S. Private Sector Pension Plans?

After the global financial crisis, U.S. private sector defined benefit pension plans experienced multiple regulatory changes that have given plan sponsors the flexibility to reduce contributions, while at the same time increasing the financial penalties for doing so. These conflicting factors have prompted many plan sponsors to review their approach to pension plan funding. In an effort to assist plan sponsors with such reviews, Aon Hewitt has published this report for prefunding an underfunded pension plan.  

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Second Offer Lump Sum Windows for U.S. Private Sector Pensions

This blog entry provides background regarding subsequent lump sum window offers.

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Past and Future of Retirement

Do retirement age assumptions used in actuarial valuations reflect true best estimates? Are there workforce planning issues stemming from demographic shifts, economics, and later retirement ages? Aon Hewitt recently completed research focusing on how to help employers understand why these changes occur, how these changes impact benefit costs, and why employers should start working now to understand how their workforces will change in the coming years.

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