Data Tools for Policymakers—Stress Testing Pension Plans

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Data Tools for Policymakers: Stress Testing Pension Plans

Even as annual employer contributions to state pension plans went up by about $7 billion in 2015, the funding gap for these funds grew by $157 billion due to low investment returns. Overall, investment underperformance over the past decade has been the largest contributor to the more than $1 trillion in reported pension debt facing state pension plans.

Volatile return scenarios have put pressure on state budgets. Policymakers need tools to better assess what will happen if returns continue to fall short of expectations and to understand how sudden asset losses from a recession would affect both the funding levels of their states’ pension plans as well as required employer contributions. Stress testing offers a set of tools for policymakers to answer these questions. Learn about these tools and how they can help you understand, manage and plan for the risk and cost uncertainty in providing and funding pension benefits.

view the webinar.