Top 10 priorities for DB plan sponsors in 2012

Nearly three-quarters (70%) of those surveyed ranked this as a “high” priority, while almost half (43%) ranked it as an “extremely high” priority for 2012. “As markets continue to be volatile, plan sponsors continue to pursue sophisticated risk management strategies designed to better control volatility of the funded status of their pension plans,” says Jon Waite, director, investment management advice and chief actuary with SEI’s institutional group.

Of those plan sponsors identifying the need to develop strategies to improve the plan’s funded status, more than half (69%) said it was at least a high priority for 2012. According to the Milliman Pension Funding Index, the average funded ratio of U.S. corporate pension plans dropped to 72.4% in December 2011. The funded status decline was primarily due to higher liabilities caused by a decrease in corporate bond interest rates. With interest rates expected to remain low, many plan sponsors will be forced to contribute to their pension plans this year in order to meet Pension Protection Act funding requirements.