US - Russell Investments has forecast a positive future for corporate pension plans in the US, predicting only one in four will have a funding status below 90% by 2017.
Michael Hall, director, investment policy & strategy, Russell, said: "The dynamics of corporate pension plans in the US have been dramatically transformed by the Pension Protection Act of 2006 and other recent changes, and we are expecting a tremendous evolution over the next decade."
Russell also predicted variations in plan experience would be felt more in contribution volatility rather than in funded status volatility. In addition, it said plan sponsors would influence their plan through benefits policy, contribution policy and investment policy, with the role of contributions becoming far more significant.
Hall added: "Traditionally, pension plans have accepted a great deal of interest rate risk and taken significant market risk, but we expect the extent of the risk taken in each of these areas to decline."
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