Investment Funds On Hook For US Pension Liabilities

Case may widen funds’ exposure to liability

HAMLIN LOVELL

Funding shortfalls have been growing in recent years for reasons including greater longevity and lower interest rates. Most pension funds do not have any hedges against rising life expectancy. Meanwhile, lower interest rates and tighter corporate credit spreads reduce the discount rate at which pension liabilities are calculated.

Additionally, many companies and pension fundsponsors around the world, including private equity firms, have been closing pension funds to new members, seeking...

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