During the fourth quarter of 2015, the funded status of the model pension plan examined in Sibson Consulting and Segal Rogerscasey’s publication, Prism, increased by 3 percentage points: from 82 percent to 85 percent.

This increase was the result of a 3 percent asset increase and a 1 percent liability increase during the quarter. Investment performance improved in the fourth quarter largely due to strong performance by domestic equities amid the strengthening of the U.S. dollar. Meanwhile, an increase in the yield curve in the fourth quarter resulted in a small increase in the effective interest rate and, consequently, a 1 percent decrease in our model pension plan’s liabilities.

Throughout 2015, the model plan’s funded status fluctuated substantially from quarter to quarter, from a high of 87 percent to a low of 79 percent.

“After a rollercoaster year in pension funding levels, plan sponsors have entered 2016 facing significant volatility in the markets,” said Stewart Lawrence, National Retirement Practice Leader. “These conditions underscore the need for plan sponsors to examine their risk-mitigation strategy.”

To speak with an expert about the findings of this report, and how it may inform plan sponsors’ decisions, contact Todd Kohlhepp.

Sibson Consulting (www.sibson.com), a member of The Segal Group, provides strategic human resources solutions to corporate and non-profit employers and professional service firms. Sibson's services include benefits, compensation, talent and performance management, communications, sales force effectiveness and change management.

Segal Rogerscasey (www.segalrc.com), a member of The Segal Group, is a leading global investment solutions firm that provides innovative, client-driven consulting advice and outsourcing solutions. The firm has been in operation for 45 years and is one of the largest U.S.-based investment consultants. Clients include corporations, non-profit organizations, endowments, foundations, state and local governments and joint boards of trustees administering benefit plans under the Taft-Hartley Act. The firm works with financial services firms through Rogerscasey, a Division of Segal Advisors, and with Canadian clients through Segal Rogerscasey Canada. The firm is also a founding member of the Global Investment Research Alliance.