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2022 Survey of Capital Market Assumptions

8/24/2022

 
At Horizon Actuarial, we are retirement and healthcare actuaries, not investment professionals.  Therefore, when developing assumptions as to what returns a pension plan’s assets might be expected to earn in the future, we seek input from our colleagues in the investment advisory community.  Each year, we survey different investment advisors and ask them to provide their “capital market assumptions” – their expectations for future risk and returns for different asset classes in which pension funds commonly invest.

The information gathered from this survey can help answer the commonly-asked question: “Are my plan’s investment return assumptions reasonable?”  Of course, there are many factors to consider when evaluating a plan’s investment return assumptions, such as its asset allocation, the maturity of its participant population, and the purpose of the measurement.  Any of these factors can make the expected return for one plan very different from others.  Therefore, this report does not opine on the reasonableness of any one plan’s investment return assumptions.  Nevertheless, we hope this report will be a useful resource for trustees, actuaries, and investment professionals alike.

Horizon Actuarial sincerely thanks the 40 investment advisors who participated in the 2022 edition of this survey.

The report on the results of the 2022 Survey can be viewed below.
2022 Survey of capital market Assumptions
This is the eleventh edition of the survey for which we have published a report.  Prior editions can be found below:
2021 Survey
2016 survey
2020 survey
2015 survey
2019 survey
2014 survey
2018 survey
2013 survey
2017 survey
2012 survey

2021 Survey of Capital Market Assumptions

8/4/2021

 
At Horizon Actuarial, we are retirement and healthcare actuaries, not investment professionals.  Therefore, when developing assumptions as to what returns a pension plan’s assets might be expected to earn in the future, we seek input from our colleagues in the investment advisory community.  Each year, we survey different investment advisors and ask them to provide their “capital market assumptions” – their expectations for future risk and returns for different asset classes in which pension funds commonly invest.

The information gathered from this survey can help answer the commonly-asked question: “Are my plan’s investment return assumptions reasonable?”  Of course, there are many factors to consider when evaluating a plan’s investment return assumptions, such as its asset allocation, the maturity of its participant population, and the purpose of the measurement.  Any of these factors can make the expected return for one plan very different from others.  Therefore, this report does not opine on the reasonableness of any one plan’s investment return assumptions.  Nevertheless, we hope this report will be a useful resource for trustees, actuaries, and investment professionals alike.

Horizon Actuarial sincerely thanks the 39 investment advisors who participated in the 2021 edition of this survey.

The report on the results of the 2021 Survey can be viewed below.
2021 Survey of capital market assumptions
This is the tenth edition of the survey for which we have published a report.  Prior editions can be found below:
2020 Survey
2019 Survey
2018 Survey
2017 survey
2016 survey
2015 survey
2014 Survey
2013 survey
2012 survey

American Rescue Plan Act of 2021 – Multiemployer Pension Provisions

3/11/2021

 
​On March 11, 2021, President Biden signed the American Rescue Plan Act of 2021 (ARPA) into law.  The key provisions for multiemployer pension plans are outlined here and summarized in more detail in the link below.  In addition, Horizon Actuarial co-sponsored a webinar with Groom Law Group, NCCMP, and Segal Consulting to discuss the relief measures on Tuesday, March 23rd at 12:00PM EDT. Click here to view a recording of the webinar.

  • Special Financial Assistance Program.  ARPA creates and appropriates funding for a financial assistance program for distressed multiemployer plans.  The program is expected to provide approximately $86 billion in relief to plans that meet the eligibility criteria.  These plans include plans in critical and declining status, plans in critical status that meet certain other conditions, plans that previously suspended benefits, and a small group of plans that recently became insolvent.  In general, the assistance is designed to ensure these plans can continue to meet their full benefit obligations for at least the next 30 years.
 
  • Funding Relief.  ARPA also provides temporary funding relief for healthier plans similar to the relief that was provided in the wake of the Great Recession.  This relief includes a zone status delay, funding improvement period and rehabilitation period extensions for plans in endangered/critical status, as well as expanded asset smoothing and funding standard account amortization extensions for certain COVID-19 related experience losses.
 
  • PBGC Premium Increases.  ARPA also includes a modest increase in the per-participant PBGC premiums starting in 2031.  The current per-participant premium of $31 for 2021 will increase each year with inflation until 2031 at which time it will increase to $52 per participant.
 
  • Notable Exclusions.  Previous proposals included discount rate limitations, changes to funding rules other than those noted above, changes in the amount of benefits guaranteed by the PBGC, and provisions for composite plans.  None of these provisions were included in ARPA.
 
A more detailed summary can be viewed at the link below.
ARPA Summary of Multiemployer Pension Provisions
Please contact your Horizon Actuarial consultant or use the "contact us" page if you have any questions.

The Multiemployer Health Plan Landscape:  A Ten-Year Look (2008-2017)

1/16/2021

 
Horizon Actuarial Services has once again partnered with the International Foundation of Employee Benefits Plans to conduct a study of U.S. multiemployer health plans.  The study covers multiemployer health plans in all industries and the plans in the study have more than five million covered participants.  

The full report – The Multiemployer Health Plan Landscape: A Ten-Year Look (2008-2017) – is available at the International Foundation’s website (link below). The report provides a look at historical trends for U.S. multiemployer health plans for the ten-year period from 2008 to 2017.  It will help plan trustees, professional service providers, and policymakers gain a better understanding of these plans and their environment. The report may also serve as a useful comparison tool, enabling trustees and advisors to understand how their plans compare with others with respect to demographics, benefit costs, income, cash flows, and more.

Selected highlights from the report are as follows:

  • Benefit costs over the past decade have increased on average of 4.8% per year.
  • Employer contributions over the past decade have increased an average of 3.8% per year.
  • More than half of all multiemployer health plans made employer contributions per plan participant per year between $6,000 and $13,999.

This is the fourth edition of the report.
​
Please contact your Horizon Actuarial consultant if you have any questions.
The Multiemployer Health Plan Landscape:  A Ten-Year Look (2008-2017)

2020 Survey of Capital Market Assumptions

7/16/2020

 
At Horizon Actuarial, we are retirement and healthcare actuaries, not investment professionals.  Therefore, when developing assumptions as to what returns a pension plan’s assets might be expected to earn in the future, we seek input from our colleagues in the investment advisory community.  Each year, we survey different investment advisors and ask them to provide their “capital market assumptions” – their expectations for future risk and returns for different asset classes in which pension funds commonly invest.

The information gathered from this survey can help answer the commonly-asked question: “Are my plan’s investment return assumptions reasonable?”  Of course, there are many factors to consider when evaluating a plan’s investment return assumptions, such as its asset allocation, the maturity of its participant population, and the purpose of the measurement.  Any of these factors can make the expected return for one plan very different from others.  Therefore, this report does not opine on the reasonableness of any one plan’s investment return assumptions.  Nevertheless, we hope this report will be a useful resource for trustees, actuaries, and investment professionals alike.

Horizon Actuarial sincerely thanks the 39 investment advisors who participated in the 2020 edition of this survey.

The report on the results of the 2020 Survey can be viewed below.
2020 survey of capital market assumptions
This is the ninth edition of the survey for which we have published a report.  Prior editions can be found below:
2019 survey
2018 survey
2017 survey
2016 survey
2015 survey
2014 survey
2013 survey
2012 survey

The Multiemployer Retirement Plan Landscape: A Fifteen-Year Look (2003-2017)

6/2/2020

 
Horizon Actuarial Services has partnered with the International Foundation of Employee Benefits Plans to conduct a study of U.S. multiemployer defined benefit pension plans.  The study covers multiemployer plans in all industries, building upon the similar study of construction industry plans that Horizon Actuarial originally conducted with the Mechanical Contractors Association of America (MCAA) in 2012.

The report – The Multiemployer Retirement Plan Landscape: A Fifteen-Year Look (2003-2017) – is available at the International Foundation’s website (link below). The report provides a look at historical trends for U.S. multiemployer retirement plans for the fifteen-year period from 2003 to 2017.  It will help plan trustees, professional service providers, and policymakers gain a better understanding of these plans and their environment. The report may also serve as a useful comparison tool, enabling trustees and advisors to understand how their plans compare with others with respect to demographics, cash flows, investments, and funding.

This is the sixth edition of the report to include information on multiemployer defined contribution (DC) retirement plans, as well as multiemployer defined benefit (DB) pension plans.
​
Please contact your Horizon Actuarial consultant if you have any questions.
The Multiemployer Retirement Plan Landscape: 2019 Edition

UA/MCAA Analysis of the Cost Impact of the Grassley/Alexander Proposal

12/13/2019

 
The United Association of Journeymen and Apprentices of the Plumbing, Pipefitting and Sprinkler Fitting Industry of the United States and Canada (United Association), Mechanical Contractors Association of America, Inc. (MCAA), and Horizon Actuarial Services, LLC have partnered to conduct an analysis of the multiemployer pension reform proposal released by Senators Charles E. Grassley (R-IA) and Lamar Alexander (R-TN) on November 20, 2019.

This analysis focuses on two key changes in the proposal – increases in PBGC premiums and limitations on discount rates, and their implications for UA multiemployer plans. Each of the proposed changes would significantly increase contribution requirements.  The report also opines on the proposed changes to the calculation of employer withdrawal liability.
​
The report can be viewed below.
UA/MCAA Analysis of the Cost Impact of the Grassley/Alexander Proposal

Please contact your Horizon Actuarial consultant if you have questions about the report or how the proposal might impact your plan.

The Multiemployer Pension Recapitalization and Reform Plan

11/22/2019

 
On November 20, 2019, Senators Charles E. Grassley (R-IA) and Lamar Alexander (R-TN) released a proposal to address the immediate financial challenges faced by a subset of multiemployer pension plans and also to secure the multiemployer pension system over the long term — the “Multiemployer Pension Recapitalization and Reform Plan.”  The proposal generally follows the outline of the reform principles considered by the Joint Select Committee in November, 2018. 

​While the proposal does provide significant relief for some of the most troubled multiemployer plans via enhanced liability partitions to the PBGC and increases in PBGC guaranteed benefits, it also imposes strict funding standards that would be harmful for participants and employers in the majority of plans that are likely to remain healthy under current law.
 
Our high-level summary of the proposal is linked below.
Summary of Grassley/Alexander Pension Reform Proposal

​Please contact your Horizon Actuarial consultant for more details including an analysis of how the proposal could affect your plan.

The Multiemployer Health Plan Landscape: A Ten-Year Look (2007-2016)

10/14/2019

 
Horizon Actuarial Services has once again partnered with the International Foundation of Employee Benefits Plans to conduct a study of U.S. multiemployer health plans.  The study covers multiemployer health plans in all industries and the plans in the study have more than five million covered participants.  

The full report – The Multiemployer Health Plan Landscape: A Ten-Year Look (2007-2016) – is available at the International Foundation’s website (link below). The report provides a look at historical trends for U.S. multiemployer health plans for the ten-year period from 2007 to 2016.  It will help plan trustees, professional service providers, and policymakers gain a better understanding of these plans and their environment. The report may also serve as a useful comparison tool, enabling trustees and advisors to understand how their plans compare with others with respect to demographics, benefit costs, income, cash flows, and more.

Selected highlights from the report are as follows:

  • The median cost of benefits for multiemployer health plans increased by 54% over the ten-year period from 2007 to 2016.
  • Over the same period, the number of covered retirees increased by 22%, while the number of active participants increased by only 1%.
  • Despite these trends, the financial condition of many of the 1,560 multiemployer health plans has improved.

This is the third edition of the report.
​
Please contact your Horizon Actuarial consultant if you have any questions.
The Multiemployer Health Plan Landscape: A Ten-Year Look (2007-2016)

2019 Survey of Capital Market Assumptions

8/19/2019

 
At Horizon Actuarial, we are retirement and healthcare actuaries, not investment professionals.  Therefore, when developing assumptions as to what returns a pension plan’s assets might be expected to earn in the future, we seek input from our colleagues in the investment advisory community.  Each year, we survey different investment advisors and ask them to provide their “capital market assumptions” – their expectations for future risk and returns for different asset classes in which pension funds commonly invest.

The information gathered from this survey can help answer the commonly-asked question: “Are my plan’s investment return assumptions reasonable?”  Of course, there are many factors to consider when evaluating a plan’s investment return assumptions, such as its asset allocation, the maturity of its participant population, and the purpose of the measurement.  Any of these factors can make the expected return for one plan very different from others.  Therefore, this report does not opine on the reasonableness of any one plan’s investment return assumptions.  Nevertheless, we hope this report will be a useful resource for trustees, actuaries, and investment professionals alike.

Horizon Actuarial sincerely thanks the 34 investment advisors who participated in the 2019 edition of this survey.

The report on the results of the 2019 Survey can be viewed below.
2019 Survey of capital market assumptions
This is the eighth edition of the survey for which we have published a report. Prior editions can be found below:
2018 survey
2017 survey
2016 survey
2015 survey
2014 survey
2013 survey
2012 survey
 
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​In Memory of Brian Dailey
  • Home
  • About Us
    • Horizon Updates
    • Selected Bios
  • Our Services
  • Resources
    • News
    • Publications
    • External Links
  • Careers
  • Contact Us