TORONTO & NEW YORK--(BUSINESS WIRE)--The funded status of The Segal Group’s model multi-employer pension plan remained stable and fully funded at 101 percent in the first quarter of 2017. This was due to a 3 percent gain in assets offsetting a 3 percent liability increase.
“The Canadian equity market rose in the first quarter with strong materials and service-sector performance, but declining oil prices weighed on overall results,” commented Cameron McNeill, Segal’s Canadian Business Leader. “Fixed income’s positive return reflected a correction to previous market expectations on interest rates.”
Segal also reported data from Statistics Canada on the number of hours worked in specific industries as a way to measure the long-term view of plan viability and ability to cover fixed costs. Of the six industries examined, only construction and utilities showed a decline.
“A reduction in the hours worked may alter the ongoing viability of a plan since it will affect the plan’s ability to cover fixed costs,” said McNeill. “This risk is magnified when a plan is dependent upon future contributions to pay down its unfunded benefit obligations.”
To speak with an expert about this issue of Direction and what our model MEPP’s funded status might mean for other MEPPs, please contact me.
The Segal Group (www.segalgroup.net) is a privately-owned benefits, compensation and investment consulting firm with more than 1,000 employees throughout the U.S. and Canada. Members of The Segal Group include: Segal Consulting, Sibson Consulting, Segal Select Insurance Services, Inc. and Segal Marco Advisors.