News Archive

"With funded status holding at elevated levels, plan sponsors find themselves at a crossroads, deciding whether to transfer pension risk or continue managing assets in-house.... Planned uses of surplus assets varied across respondents ... After a decade-long decline, the expected return on assets (EROA) assumptions moved higher for the third consecutive year.... The average discount rate was 5.4% at the end of 2025, down 10 basis points from the prior year."  MORE >>

"Rev. Proc. 2026-3 says specifically that IRS will no longer issue PLRs on Section 420 transfers to a Section 401(h) retiree health account. However, the revenue procedure doesn't say IRS won't issue rulings on Section 420 transfers to a life insurance account. It's unclear whether IRS intended to limit its no-rule decision to transfers to a 401(h) account, and if so, what the agency's reason for doing so might be.... Instead of pursuing a Section 420 transfer, some employers might consider terminating their overfunded DB plans to take advantage of advantageous annuity pricing."  MORE >>

"[1] Supreme Court will consider 'meaningful benchmark' standard for ERISA imprudent-investment claims ... [2] Fourth Circuit Court of Appeals vacates district court decision certifying class ... [3] Third Circuit Court of Appeals affirms summary judgment, agreeing that defendants engaged in a prudent process ... [4] Recent developments in pension risk transfer cases ... [5] District court grants motion to dismiss claims challenging health plans' prescription drug costs with prejudice."

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"This notice provides guidance on the corporate bond monthly yield curve, the corresponding spot segment rates ... and the 24-month average segment rates ... [as well as] the interest rate on 30-year Treasury securities ... as in effect for plan years beginning before 2008 and the 30-year Treasury weighted average rate[.]"  MORE >>

"The Ninth Circuit recently issued a pair of decisions clarifying how the rules governing withdrawal liability apply to employers in certain industries. In [one case] the Court held that an employer did not withdraw from a multiemployer pension plan, and thus did not owe withdrawal liability, because the employer's asbestos abatement work qualified for the 'building and construction industry' exemption. And in [a second decision], the Court held that the plan primarily covered employees in the entertainment industry because the majority of employees in the plan performed at least some entertainment-related work." 
[Walker Speciality Constr. Inc. v. Bd. of Trustees of the Constr. Ind. and Lab. Jt. Pension Trust for S. Nev., No. 24-1560 (9th Cir. Jan. 5, 2026); Nevada Resort Ass'n-Int'l Alliance of Theatrical Stage Emps. & Moving Picture Mach. Operators of the US & Canada Loc. 720 Pension Tr. v. JB Viva Vegas, LP, No. 24-2791 (9th Cir. Jan. 6, 2026)]  MORE >>

"USPS ‌told the White House Office of Personnel Management that effective Friday it will stop making $200 million payments every other week for its employer contributions for the defined ​benefit portion of the Federal Employees Retirement System. USPS warned Thursday ​that without reforms it could run out of cash as ⁠soon as February."  MORE >>

"[T]he Sixth Circuit became the first federal appellate court to weigh in, determining that ERISA prohibits employers from using unreasonable or outdated actuarial assumptions when calculating joint and survivor annuities. Just days later, the Eastern District of Missouri reached the opposite conclusion ... The decision whether to proactively amend plan assumptions is not straightforward. Updated assumptions can increase plan liabilities, and an amendment could be characterized as a tacit acknowledgment that the prior assumptions were inadequate, potentially strengthening retroactive claims."  MORE >>

"This report provides a comprehensive literature review on the effects of pension plans on corporations and presents an enterprise discounted cash flow model for firm valuation incorporating pension risks.... The case studies also show that pension de-risking strategies should be considered under the firm's optimal capital structure.... While the primary goal of pension surplus is to enhance the benefit security of plan participants, pension surplus may also be a strategic asset that can potentially improve the corporate value."  MORE >>

46 pages. "This report breaks down financial and investment data by fiscal year-end dates -- incorporating data collected from fall 2021 through fall 2025 to more clearly reflect performance trends over time."  MORE >>

"For plan sponsors with overfunded frozen defined benefit (DB) plans, several strategies are available to reduce risk and prepare for a future termination -- even before the termination process formally begins.... Even if a full plan termination isn't on the table for your company this year, smaller-scale pension risk transfer activities can make a real difference."  MORE >>

"Pension finances lost ground in March due to declining stock markets, but higher interest rates softened the blow. Both model plans ... lost 1% last month, and are now slightly underwater through the first quarter of 2026."  MORE >>

"The court found that because ERISA requires a qualified joint and survivor annuity (QJSA) to be the actuarial equivalent of a participant's accrued benefit, there is an implicit requirement under ERISA that plans must use reasonable assumptions when assessing equivalence -- even though ERISA does not say so explicitly.... The circuit court did not decide whether the plans' assumptions were, in fact, reasonable, but instead remanded that issue back to the district courts."  [Reichert v. Kellogg, No. 24-1442, consol. Watt v. FedEx, No. 24-5945 (6th Cir. Mar. 16, 2026); Landel v. Olin Corp., No. 25-0096 (E.D. Mo. Mar. 20, 2026)]  MORE >>

"In this article [the authors] examine the involvement of PE firms (or, more generally, alternative asset managers) in the US insurance industry and address some of the risks cited by observers, including the use of reinsurance to affiliates and the use of structured and private credit."  MORE >>

"This final rule ... prescribe[s] the spreads component of the interest assumption under the asset allocation regulation for plans with valuation dates of April 30, 2026 - July 30, 2026. These interest assumptions are used for valuing benefits under terminating single-employer plans and for other purposes."  MORE >>

"[T]hese cases show that courts (and particularly the Sixth Circuit) are willing to scrutinize dated actuarial assumptions used by defined benefit pension plans.... [T]he tables in these cases ... are by no means outliers. Mortality tables of this vintage are used by the majority of plans nationwide. While this has been an accepted industry practice for decades, this Sixth Circuit ruling demonstrates that it is not without risk." [Reichert v. Kellogg, No. 24-1442, consol. Watt v. FedEx, No. 24-5945 (6th Cir. Mar. 16, 2026)]  MORE >>

"[T]he Sixth Circuit reversed the orders of two district courts that had granted motions to dismiss and held that the use of outdated mortality tables violates ERISA.... The [Missouri district court] held that the plain language of ERISA's statutory text does not require that mortality tables be periodically updated or reasonable and, therefore, use of the mortality table designated in the plan document does not violate ERISA or breach ERISA's fiduciary duties." [Reichert v. Kellogg, No. 24-1442, consol. Watt v. FedEx, No. 24-5945 (6th Cir. Mar. 16, 2026); Landel v. Olin Corp., No. 25-0096 (E.D. Mo. Mar. 20, 2026)]  MORE >>

"The Program is open to employers, plan sponsors, unions, and supporting practitioners (like lawyers and actuaries).... Submissions to the Program are made electronically.... The Program also includes a searchable database that will serve as a public repository of opinion letters issued by the Office of the General Counsel from 1974 to date."  MORE >>

"This notice provides guidance on the corporate bond monthly yield curve, the corresponding spot segment rates ... and the 24-month average segment rates ... [as well as] the interest rate on 30-year Treasury securities ... as in effect for plan years beginning before 2008 and the 30-year Treasury weighted average rate[.]"  MORE >>

"Reversing two district court dismissals, the court held that ERISA's actuarial equivalence requirement imposes substantive limits on the assumptions plans may use, including a prohibition on unreasonably outdated mortality tables.... Writing for the majority, Judge Stranch framed the central question as whether ERISA's actuarial equivalence requirement permits plans to rely on assumptions that are materially disconnected from current reality. The court answered in the negative." [Reichert v. Kellogg, No. 24-1442, consol. Watt v. FedEx, No. 24-5945 (6th Cir. Mar. 16, 2026)]   MORE >>

"Both annuity purchase interest rates declined by an average of 16 basis points entering the month of March.... With many pension plans still in a healthy funded position and interest rates remaining above historical averages, plan sponsors have an opportunity to stay proactive."  MORE >>

"How legal and regulatory requirements affect DB plan asset allocation ... Pension plan asset allocation: The impact of plan demographics ... Plan benefit structure shapes pension liabilities and investment strategy ... DB asset allocation: The goals of the plan sponsor."  MORE >>

"[T]he Second Circuit held that 'unfunded vested benefits allocable to the employer,' as used in Section 1415(c), refers to the entire amount of liabilities transferred when an employer withdraws pursuant to Sections 1415(a) and 1415(c).... The decision represents a significant clarification of how withdrawal liability must be calculated when an employer is forced to withdraw from a [multiemployer plan] due to a union representation change." [Mar-Can Transportation Co., Inc. v. Loc. 854 Pension Fund, No. 24-1431 (2d Cir. Feb. 18, 2026)]  MORE >>

"In 2011 and 2012, Alabama enacted major reforms to manage the runaway growth of the state's public employee pension debt. The changes, including higher retirement ages, increased employee contributions, and reduced benefits for new hires, were some of the most extensive in the nation.... Fourteen years later, the need for another round of reform is as great as ever."  MORE >>

"[T]he Third Circuit affirmed summary judgment in favor of two companies accused of successor liability for a defunct employer's withdrawal liability, holding that the pension fund's eight-year delay in issuing a withdrawal liability demand violated the Multiemployer Pension Plan Amendments Act's requirement that notice and demand be made 'as soon as practicable.' " [RTI Restoration Techs., Inc. v. Int'l Painters & Allied Trades Indus. Pension Fund, No. 24-2874 (3d Cir. Mar. 3, 2026),]  MORE >>

"[T]he PRT landscape has shifted dramatically as a result of increased competition.... Sponsors can now eliminate the cost and risk of retiree obligations while improving their balance sheets and potentially reducing pension expense, making PRT a win-win solution.... The premium for this type of transaction is as low as it has ever been, but there's no guarantee it will stay that way. Plan sponsors should consider a PRT transaction today."  MORE >>