Remember how pension deficits were huge and insurmountable? Not so much, any more.
On its way to posing the question, will they be buyers of bonds?, JPMorgan‘s Flows & Liquidity team notes that the funding chasm is now more of a crack:
The funding gap of the 100 largest US corporate defined benefit pension plans peaked in July 2012 at -$546bn and had declined to -$140bn at the end of January. The deficit of UK defined benefit plans peaked at -£293bn in July 2012 and had declined to a low of -£28bn in December.
We could have sworn we were told that paying high-fee alternative asset managers was the only way pension funds stood a chance of meeting their liabilities, but it looks like stocks and moderately higher rates have put in the hard yards instead. Read more