Administration February 5, 2013

Pension Funded Status Reaches 2012 High

February 5, 2013 (PLANSPONSOR.com) – At 81.2% in January, U.S. corporate pension plans saw their best funded level since March 2012, BNY Mellon reports.
Reported by

According to the BNY Mellon Investment Strategy and Solutions Group (ISSG), the 4.9 percentage point increase was caused by rising equities markets, which raised asset levels, and higher interest rates, which reduced liabilities.

Assets for the typical plan increased 3.0% in January, and equities markets rose more than 5.0% in the U.S. and international developed markets, according to the BNY Mellon Pension Summary Report for January 2013. Liabilities fell 3.2% as the Aa corporate discount rate rose 24 basis points to 4.13%. 

For more stories like this, sign up for the PLANSPONSOR NEWSDash daily newsletter.

“This is a great start for the year for corporate pension plans in the U.S., and we’ve now had three months in a row of steady improvement in funded status,” said Jeffrey B. Saef, managing director of BNY Mellon Investment Management and head of the ISSG. 

—Sara Kelly 

Products February 5, 2013

Fidelity Adds Health Care to Retirement Guidance

February 5, 2013 (PLANSPONSOR.com) – Fidelity Investments and Extend Health, a Towers Watson company, are partnering to enhance Fidelity’s retirement guidance capabilities to include retiree health care.
Reported by

Under the agreement, Fidelity and Extend Health will provide retiring participants losing company-sponsored health plan coverage access to resources and support to get quality coverage at a price they can afford. Together the two companies will also assist plan sponsors transitioning from employer-sponsored retiree medical insurance as they communicate changes and help retirees select a private insurance option that best suits retirees’ unique needs.   

Access to the Extend Health exchange enhances Fidelity’s Plan for Life workplace guidance experience by incorporating retiree health care into retirement planning conversations. Participants can receive help selecting private insurance from more than 80 national and regional health insurance providers with thousands of plans to meet their specific needs. The choices provided to the participant are based on several factors including their desired level of coverage and medical needs, financial situation and availability due to geographic considerations.   

Never miss a story — sign up for PLANSPONSOR newsletters to keep up on the latest retirement plan benefits news.

Fidelity will begin offering the service to its plan sponsor clients during the third quarter, in time for this year’s benefits enrollment season.  

“With health care being one of the most underestimated costs in retirement and Medicare not covering all medical expenses, an increasing number of employers are asking for help in transitioning their employees into retirement,” said Christi Rager Wise, senior vice president, Fidelity Investments. “Our agreement with Extend Health will expand the financial guidance Fidelity provides employees transitioning into retirement while also helping them tackle one of the biggest risks to financial security in retirement: the cost of health care.”  

Fidelity Investments estimates a 65-year-old couple retiring in 2012 needs $240,000 to cover medical expenses throughout retirement (see “Health Care Costs Could Consume Retirees Income”). 

«