It seems almost silly that we are presenting you with a Fourth Quarter review for 2015 given what has transpired in the markets through the first 19 days of 2016. However, we think that it is important that one understand that 2015 wasn’t as bad for pensions and Pension America as most people believe, and certainly not nearly as bad as 2014.
Why? Well, despite the significant underperformance of plan assets relative to DB plan ROA’s, assets actually modestly outperformed liability growth last year. Thanks to Ron Ryan and his firm (Ryan ALM), we have a great understanding of what is happening to pension liabilities on a monthly basis, and you should, too. Unfortunately, most DB plans only get a yearly view on their liabilities, and then only valued at the ROA as the discount rate.
We hope that you continue to find our thinking on pension related issues useful. As always, please don’t hesitate to call on us if we can be of any assistance. You can also glean our insights from the KCS website, blog and social media accounts that are highlighted in the attached review.
May 2016 be a year filled with great health, much laughter, many friends, and peace!