"Pension discount rates continued increasing in February, and are up almost 0.50% so far in 2021, which means lower liabilities for pension plan sponsors.... [M]ost pension plans will see at least modest improvements in their funded status for the month. Those with higher equity allocations will see the largest improvements."

"Although many sponsors will welcome the funding relief in ARPA, in its current form that legislation does present some technical issues, mainly due to the early/retroactive effective dates of some proposals."

"If this relationship between (older, lower) lump sum valuation rates and current rates continues for the rest of 2021 ... paying out a lump sum in 2022 will generally be a 'better deal' for the sponsor than paying it out in 2021. And second, if a lump sum is paid out in 2021, the additional cost (resulting from the use of the older, lower valuation rate) will show up as an increase in balance sheet net liabilities."

"On [March 1], the Senate Parliamentarian ruled that the multiemployer pension plan bailout provisions in the $1.9 trillion American Rescue Plan (a.k.a. the latest COVID-19 relief bill) would be eligible for a simple majority vote in the Senate as part of the budget reconciliation process, and thus will remain as part of the relief bill likely to become law shortly."

"Pension finance enjoyed its best month in more than three years in February, buoyed by higher stock prices and higher interest rates.... Plan A gained 5% and is now up more than 7% for the year, while the more conservative Plan B added 1% and is now up more than 1% through the first two months of 2021[.]"

"Section 9704 would establish a fund within the PBGC and appropriate amounts as necessary to provide special financial assistance to certain multiemployer DB plans. The special financial assistance would not have to be repaid."

An unofficial monthly report of the Moody's Daily Long-term Corporate Bond Yield Averages and Moody's Daily Treasury Yield Averages (used as benchmarks by some corporate pension plans).

"There were 177 new buy-out contracts sold covering 259,342 participants in the fourth quarter. For the full year, there were 432 buy-out contracts sold, representing 408,277 participants. In the fourth quarter 2020, there were two buy-in contracts totaling $1.6 billion. This is the highest quarterly total for buy-in products ever reported. For the year, buy-in product sales totaled $1.8 billion, 4% below 2019 sales results."

"Questions regarding how many pension plans will require relief, and practical considerations about how the PBGC will secure the funding to relieve the eligible plans, remain up in the air. Interestingly, there may be fewer eligible funds than predicted."

"State and local government pension systems are increasingly dependent on investment returns, and at risk of increasingly volatile results, as funding levels remain depressed and systems increasingly start to pay out more than they take in[.]"

"This article looks at where contribution requirements are headed and the considerations pension plan sponsors should have in determining how much to contribute to their pension plan trust."

"Organizations considering a conversion to the International Financial Reporting Standards (IFRS) from U.S. Generally Accepted Accounting Policies (U.S. GAAP) should note that there are differences surrounding employee benefit plans. This could result in a significant impact to the financial statements, particularly for organizations with large defined benefit plans."

"[T]he assumed rate of return for investments in the North Carolina Retirement Systems Fund will be reduced from 7% to 6.5%. The move was unanimously approved by the boards representing teachers, state employees and local government employees on Jan. 28."

"There are new insurance companies that have been formed for this type of business and there are old insurance companies that restructured the way they had historically operated. The structure is highly complex and rides the legal edge of several intersecting regulations, all of which may be extremely risky both for the insurance companies and for the employees whose pensions are insured."

"This In Focus describes ... provisions of the Butch Lewis Emergency Pension Plan Relief Act of 2021 ... A separate In Focus ... details Section 9704 in Subtitle H.... [1] Temporary delay of designation of multiemployer plans as in endangered, critical, or critical and declining status.... [2] Temporary extension of the funding improvement and rehabilitation periods for multiemployer plans in critical and endangered status for 2020 or 2021.... [3] Adjustments to funding standard account rules.... [4] Extended amortization for single employer plans.... [5] Modification of special rules for minimum funding standards for community newspaper plans.... [6] Cost of living adjustment freeze." [IF 11766, Feb. 23, 2021]

"Puerto Rico's governor announced Tuesday that a federal control board reached a key deal that would reduce the U.S. territory's overall debt by nearly 80 percent, but that his administration is rejecting it because it would require cuts to the island's crumbling public pension system."

"Section 9704 [of the Butch Lewis Emergency Pension Plan Relief Act of 2021] would establish a fund within the PBGC and appropriate amounts as necessary to provide special financial assistance to certain multiemployer DB plans. The special financial assistance would not have to be repaid." [IF11765, Feb. 23, 2021]

"New Jersey Gov. Phil Murphy ... will call for a $6.4 billion payment to the pension system in his budget address Tuesday ... The Murphy administration has been ramping up pension payments and originally intended on making a payment of $5.76 billion for the fiscal year that begins in July."

99 pages; Jan. 15, 2021."This Report's central aim is to illuminate the pension problems faced by state and local governments, policymakers, and taxpayers -- and to encourage states and localities to address these problems."

[BenefitsLink note: This document was published by DOL on Jan. 19, 2021, removed from the DOL website on Jan. 20, 2021, and subsequently released by the authors.]

"Given the level of support, and the importance of the issue being solved, [PRC was] disappointed by the Washington Post's February 17 editorial that was critical of multiemployer relief being included in the COVID relief package. In fact, COVID-relief legislation is exactly where multiemployer reform belongs."

"[F]or 2021 (thus far) interest rates are increasing -- valuation interest rates are up around 35 basis points since the beginning of the year -- and that fact presents a number of significant and complicating issues for sponsors considering de-risking."

"[The Butch Lewis Emergency Pension Plan Relief Act of 2021] contains broadly available funding rule changes for single-employer and multiemployer pension plans, and significant financial assistance to deeply underfunded multiemployer pension plans. It would also increase PBGC multiemployer premiums and freeze the indexing of the Internal Revenue Code section 415 and 401(a)(17) compensation limits effective for plan years beginning after 2030."

"As of December 31, 2020, the aggregate funded percentage of all multiemployer plans climbed to 88%, from 85% the year prior. This marks the highest aggregate funding level for these plans since December 31, 2007, before the global financial crisis. Strong investment returns for the year helped buoy pension funding in 2020, despite a turbulent year full of market volatility and economic stressors due to the COVID-19 pandemic."

"Plan funding status improved ... Annuity purchase cost increased: Annuity purchase interest rates increased; Annuity purchase activity decreased ... Annuity purchase cost is 98%-103% of the pension accounting value (GAAP PBO). Now is the time to analyze annuity purchase cost versus PBGC savings."

"[U]nfunded liabilities remain the norm [for public pensions], with fund managers continuing to make politicized but underperforming investment decisions rather than prioritizing returns for beneficiaries.... South Dakota is a shining example, with a funding ratio of over 100 percent and investment returns that are 71 basis points stronger than the 60/40 index portfolio."