- 58% of pension plan managers say their funded status has improved over the past year
- But more than two-thirds (68%) say they will or are likely to increase contributions this year, Ortec Finance survey shows
US pension plans have experienced an improvement in their funded status over the last year. However, despite the improvements of assets over liabilities, the majority of plans surveyed say they are likely to increase contributions this year, according to a new survey* from Ortec Finance, a leading global provider of risk and return management solutions for pension funds. The survey targeted senior pension fund executives in the US whose plans collectively manage $670.4 billion in assets.
Around 58% of US pension plan managers surveyed say their funded status has improved over the past year including 6% who say it has improved dramatically. Around a third (30%) say their funded status is unchanged over the past 12 months and only 12% say it has deteriorated.
However, the pension plan managers questioned say there is a possibility they will increase contributions and bolster their assets for the coming year. Only around one in ten plan managers surveyed reported that they definitely will not increase contributions, suggesting that many feel the need to leave open the option for improving the relative relationship between their assets and liabilities.
The survey suggests that despite improved funded status, US plan managers could be skeptical about continued funded status improvements. Around 10% say the pension plan they work for definitely will increase contributions this year. More than half (58%) say it’s likely that the pension plan they work for will increase contributions this year, and one in five (22%) say it might happen.
Richard Boyce, Managing Director North America at Ortec Finance breaks down the suggested skepticism of plan managers: “When it comes to the long-term health of a pension fund, an improved funded status in one year may not carry over to the long run health of the fund.
“Keeping the door open to increased contributions to sustain the relative value of assets over liabilities is reasonable. There are issues to consider in order to maintain this improvement in their funded status, particularly during periods of volatility, which is why it’s important to keep clear and detailed oversight of both the assets and liabilities of a fund."
Ortec Finance provides solutions for pension plans to help address issues including low yields, complex liabilities, increasing investment performance analysis demands, and climate change related risks and opportunities. For more information on its software and services go to Pension Funds.
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Notes to editors:
* Independent research company PureProfile surveyed 50 senior pension fund executives in the US across public, corporate, endowment and Taft-Hartley multi-employer pension plans managing around $670.4 billion worth of assets. The survey was conducted during November 2024.
For more information, contact:
Phil Anderson, Perception A.
phil@perceptiona.com / +44 7767 491 519