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The environment in which pension plan sponsors operate is changing at a pace never before seen. The financial performance of pension plans during 2007 resembled a rollercoaster, with funding status seeing a peak of $149 billion surplus and a trough of $109 billion deficit. 2008 has shown no moderation of this trend as the equity markets have decreased significantly in conjunction with distressed credit markets. This has been accentuated by the recent credit crisis, highlighting poor risk management by some of the world's most sophisticated financial institutions.
As a result, the risks and corresponding volatility of pension plans are gaining attention. Equity and bond analysts are digging below the surface of pension plan management and assessing organizations based on the financial risks that exist in their pension plans. Plan sponsors must assess how pension plan risks affect their company's bottom line.
How has recent volatility in capital markets affected pension plan funding levels?
How do investors and analysts reflect pension risks in their valuations?
What risk-management strategies are available to address these issues?
What steps need to be taken to prepare for 2009 and beyond?
Our Webcast titled "Riding the Pension Rollercoaster — Tracking Surplus Volatility" addresses these questions and more. Listen to the discussion, led by Joe McDonald, Hewitt's Global Risk Services Leader for North America, and featuring David Zion, Managing Director at Credit Suisse.
Click here to launch or download the Webcast.
Plan sponsors must understand how market changes impact their pension plans. To view an interactive series of indices that show the aggregate funding levels of pension funds from FORTUNE® 500 companies, take a look at Hewitt's Pension Risk Tracker.
About Our Expert
Joe McDonald is a principal in Hewitt's Retirement and Financial Management Practice. He leads our Global Risk Services Group for North America. Joe consults on all aspects of retirement plan management, notably working with clients on developing and implementing strategies related to the design, financing, and investments of their defined benefit plans. He is a Fellow of the Society of Actuaries and an Enrolled Actuary. Joe earned a BA degree in mathematics from Washington College in Chestertown, Maryland. He has been with Hewitt since 1998.
