Pension Indicator Updated for February 29, 2024

Jurassic Park, but for Pensions

By: Matthew Klein, Vice President & Senior Consulting Actuary, USICG

I’ve been in the pension business for nearly 25 years, and funny enough I’ve been told that pensions were dinosaurs that entire time. But just like fashion, pensions are starting to come back in style again.

In retirement circles it is not news now that IBM turned their pension plan back on. The state of Alaska is also considering a bill to re-open their pension plan that has been closed since 2005 in an effort to enhance their benefits package to recruit and retain workers1. Increasingly, as the unemployment rate has remained very low, employers are searching for ways to stand out from their competitors. 

There has been plenty of time for reflection, and there are modern pension designs now that close the weaknesses of the traditional final average pay pensions of the 80s and 90s. These new pensions share the risk between employer and employee in an equitable manner. These innovative designs are intended to keep the pension fully funded at all times, eliminating underfunding risk as long as you fund the current year accruals. 

If you are looking for a way to attract and retain employees in this highly competitive market, we would welcome the opportunity to discuss how a modern pension design could help your business.

As always, thanks for reading, and drop us a comment on how we're doing.

This email address is being protected from spambots. You need JavaScript enabled to view it. or Clearstead to discuss this information further.

For more information on the development of the Pension Indicator, please see our Disclosure document.

Information provided in this article is general in nature, is provided for informational purposes only, and should not be construed as investment advice. Performance data represents past performance. Past performance is not indicative of future results.

1https://reason.org/commentary/bill-would-make-alaska-gold-standard-in-defined-contribution-retirement-plans/#:~:text=Senate%20Bill%2088%20(SB%2088,teachers%2C%20and%20public%20safety%20personnel

Year to Date Investment Mix (Net)
Plan TypeGrowthBalancedLDI LiteLDI
Frozen (for several years) 5.3% 4.3% 2.8% 0.6%
 Recently Frozen 6.5% 5.5% 4.0% 1.8%
 Ongoing Traditional 7.9% 6.9% 5.3% 3.1%
 Cash Balance 5.7% 4.7% 3.2% 1.0%
Month-over-Month Investment Mix (Net)
Plan TypeGrowthBalancedLDI LiteLDI
 Frozen (for several years) 4.3% 3.4% 2.2% 0.4%
 Recently Frozen 4.8% 3.9% 2.7% 0.9%
 Ongoing Traditional 5.4% 4.5% 3.3% 1.5%
 Cash Balance 4.5% 3.6% 2.4% 0.6%
12-Month Change Investment Mix (Net)
Plan TypeGrowthBalancedLDI LiteLDI
 Frozen (for several years) 14.4% 12.2% 10.2% 7.0%
 Recently Frozen 15.2% 13.0% 10.9% 7.8%
 Ongoing Traditional
16.1% 13.9% 11.8% 8.6%
 Cash Balance 14.7% 12.4% 10.4% 7.2%

Please click on the "Historical" tab at the top of the website for longer time periods, including Five-Year and Return Since Inception (1/1/2016).


Frozen Plan 7 31

Recently Frozen Plan 7 31

Ongoing Plan 7 31

Cash Balance 7 31

Disclosure