We are pleased to provide you with the KCS First Quarter  2015 Update.

We live in very interesting times for the global markets, as witnessed during the first quarter’s action. The fall in global interest rates continues to challenge most market observers’ expectations, especially with regard to US rates. The growth in pension liabilities continues to outpace asset growth, putting additional pressure on the funded status of most DB plans.  Just meeting the ROA expectation isn’t enough these days if your plan is in an underfunded state.  Asset growth needs to be focused on eclipsing liability growth by a healthy margin. If not, don’t be surprised to see the plan’s UAAL growing substantially.

But, the decline in long-term interest rates isn’t solely a pension issue, as low rates continue to make it very challenging for retirees to create a monthly income stream without eating into their balances or forcing individuals to assume much more risk.

We are prepared to help you with both your assets and liabilities.

Thank you for your continuing support of KCS.

Sincerely,

Dave, Ivory, Jock, Larry, Lillian, Penn and Russ