Risk relating to retirement plans is having a real and current
impact on company performance and is now becoming a board-level agenda item for
many companies.
Asset values are adjusted in line with index movements based on
holdings in the major asset categories. There is also a small deduction to
assets on the wind-up basis to allow for illiquidity within certain asset
classes.
Liabilities are calculated on a mark to market basis. The
accounting liabilities are valued with reference to yields on AA corporate
bonds of appropriate duration. The wind-up/settlement liabilities are valued
with reference to the yields on Government bonds of appropriate duration.
Please see below for further details.
The charts can be plotted over a time frame selected by the user.
Values that can be plotted include the net surplus or deficit position, the
asset and liability values, as well as the daily change in the funded position.
Indices available are the FTSE100 index, FTSE250 index, FTSE 350 index and
Fortune 500.
These indices are the start of a progressive development, which
will include:
-
figures based on other indices, from the major economies around the world
-
figures illustrating “Value at Risk” metrics for the FTSE and other indices
Indices in isolation rarely explain what is happening to the
financial dynamics of pension schemes, so there will be regular commentary
posted by Hewitt's actuarial and investment specialists, with their views and
analysis of the issues affecting pension plans.
Please
contact us
for information about our Pension Risk Tracker tool.
