Briefings

Discount rates rose sharply, ending a 5-month streak of declines and reducing pension liabilities.
• Major asset classes across the board ended the month with negative returns.
• Depending on liability duration, funded status, and equity exposure pension plans may have seen anywhere from slight decreases in funded status (shorter duration, more fixed income exposure) to increases on the order of magnitude of 0.5% – 2.0% (average duration, more equities, underfunded).

Treasury yields moved lower again in August as the market reacted to Fed Chair, Jerome Powell’s indication that the Fed would begin an easing cycle with an initial rate cut in September.

Treasury yields moved lower again in August as the market reacted to Fed Chair, Jerome Powell’s indication that the Fed would begin an easing cycle with an initial rate cut in September.

Key takeaways Discount rates dropped slightly due in July as the Treasury yield curve shifted lower…

Key takeaways Discount rates dropped slightly due in June as the Treasury yield curve shifted lower…

Key takeaways. Discount rates dropped slightly due to market volatility while the Treasury yield curve shifted lower but remained inverted…

Treasury yields increased significantly during the month of April, raising pension discount rates along with them while credit spreads held steady. With the significant rise in discount rates, we expect pension liabilities will have decreased approximately 3.5% – 6.5% depending on a pension plan’s characteristics.