Latest news with #Milliman
Mint
2 days ago
- Business
- Mint
Pension funds won't save the bond market
Pension funds are in a healthier financial state than they have been in many years. That is good news for their beneficiaries, but not great for the long-term bond market, or the private-equity industry. Only a slice of Americans in private employment these days have the benefit of a corporate defined-benefit retirement plan. Yet corporate pension funds still represent a major force in the markets, with more than $3 trillion in assets, according to Federal Reserve data. Pension funds have been a driver behind the growth and success of the private, alternative investment industry. And they are key players in the market for corporate and government bonds because they have long future payout obligations that can match those securities' long duration. So when they start to change what they do, it is a big deal. Thanks to strong equity returns and rising yields in recent years, corporate pension plans have made a big jump in how well their assets can cover their future obligations. Back in 2020, the 100 largest U.S. public-company corporate defined-benefit pensions in an index tracked by actuarial and consulting firm Milliman had an aggregate funded ratio of 88%. Some of the largest pensions in the index include those sponsored by automakers Ford Motor and General Motors, along with aerospace companies RTX and Boeing. Then at the end of 2024, Milliman's tracker showed a ratio of 101%. It was the first time since 2007 the index had reached full funding. This is a big change that investors should consider as they weigh the recent move up in yields on 30-year Treasury bonds. The question is whether that move, sparked in part by worries about the U.S.'s future fiscal deficit, represents a lasting shift in yields. Yields on 30-year Treasurys in May touched 5.15%, near their highest level since 2007, and are still trading around 5%. With full funding and with many corporate pension plans being 'frozen" to new beneficiaries, their focus can increasingly shift away from chasing returns to catch up. Instead, they can focus on matching their assets and liabilities and keeping enough liquidity on hand to make their continuing payouts. Getting to a derisking point for some pensions has been aided by a lot of buying of bonds that could effectively match up with their long-term liabilities. But from here, many pensions might be thinking not only of shifting out of riskier equities, but also out of the longest-term bonds and into more intermediate-dated ones as their pool of beneficiaries ages. This dynamic has arguably been one factor at play at the long end of the bond market, meaning in the bonds with the furthest-away maturities. U.S. Treasury data tracked by research analysts at Bank of America show a drop-off in demand for a form of long-term Treasury securities popular with pension funds in the early months of 2025. 'You don't see the same strong demand from well-funded pensions for bonds at the long end of the curve," says Meghan Swiber, U.S. rates strategist at Bank of America. Besides shifting into more medium-term bonds, it also can make sense for funds with aging beneficiaries to wind down some relatively illiquid investments, including private equity, in favor of ones that can be more readily sold when needed. 'As funded status increases, it's time to take risk off the table," says Gary Veerman, head of institutional solutions at investment manager Capital Group. 'Illiquidity now can be a big headwind to pensions." Government-employee pension plans typically have a different mix of assets than private corporate plans. They are often far more underfunded. Milliman's index of 100 large public plans, including large state and local plans, had a funded ratio of around 80% as of April. Unlike a 'frozen" private pension plan, an active public pension can also still be adding new beneficiaries. These funds often rely much less on fixed income, instead seeking out the higher returns on equities, both of the public and private variety. The index of public pensions' allocation to fixed income has been roughly 20% in recent years, according to Milliman's most recent annual study, versus more than 50% for the index of corporate pensions. Of course pension funds are hardly the only buyers of long-term Treasurys, or the only partners in private-equity funds. The recent rebound performance of stocks, and the climb in yields, might lead some funds to rebalance. And more pension funds might opt to grab long-term bonds if yields keep rising. Both Wall Street and Washington should be watching these funds' next moves closely. Write to Telis Demos at
Business Wire
3 days ago
- Business
- Business Wire
Milliman analysis: Public pension funding stable in April after plans end volatile month with slight market gain
SEATTLE--(BUSINESS WIRE)-- Milliman, Inc., a premier global consulting and actuarial firm, today released the latest results of its Public Pension Funding Index (PPFI), which analyzes data from the nation's 100 largest public defined benefit plans. Despite April market swings caused by trade and tariff uncertainty, the Milliman 100 PPFI plans closed the month with estimated investment gains of 0.4% in aggregate. Individual plans' estimated returns ranged from -1.8% to 1.4%. Combined, the plans added about $24 billion in market value during the period, rising to $5.213 trillion as of April 30. Meanwhile, the deficit between plan assets and liabilities was unchanged since March at $1.340 trillion. The PPFI funded ratio rose from 79.5% as of March 31 to 79.6% as of April 30. 'After significant market fluctuations caused by trade policy announcements, it was somewhat surprising to see the public pension funded status inch upward during April,' said Becky Sielman, co-author of the Milliman PPFI. 'By the end of the month, 25 plans were still more than 90% funded and 12 plans were less than 60% funded, the same breakdown observed in March—demonstrating that public pensions are well-positioned to withstand turbulent markets.' Public Pension Funding Index or Milliman's full range of annual Pension Funding Studies. To receive regular updates of Milliman's pension funding analysis, contact us at pensionfunding@ About Milliman Milliman leverages deep expertise, actuarial rigor, and advanced technology to develop solutions for a world at risk. We help clients in the public and private sectors navigate urgent, complex challenges—from extreme weather and market volatility to financial insecurity and rising health costs—so they can meet their business, financial, and social objectives. Our solutions encompass insurance, financial services, healthcare, life sciences, and employee benefits. Founded in 1947, Milliman is an independent firm with offices in major cities around the globe. Visit us at
Yahoo
3 days ago
- Business
- Yahoo
Milliman analysis: Public pension funding stable in April after plans end volatile month with slight market gain
Milliman PPFI funded ratio rises 10 basis points to 79.6% as of April 30 SEATTLE, May 30, 2025--(BUSINESS WIRE)--Milliman, Inc., a premier global consulting and actuarial firm, today released the latest results of its Public Pension Funding Index (PPFI), which analyzes data from the nation's 100 largest public defined benefit plans. Despite April market swings caused by trade and tariff uncertainty, the Milliman 100 PPFI plans closed the month with estimated investment gains of 0.4% in aggregate. Individual plans' estimated returns ranged from -1.8% to 1.4%. Combined, the plans added about $24 billion in market value during the period, rising to $5.213 trillion as of April 30. Meanwhile, the deficit between plan assets and liabilities was unchanged since March at $1.340 trillion. The PPFI funded ratio rose from 79.5% as of March 31 to 79.6% as of April 30. "After significant market fluctuations caused by trade policy announcements, it was somewhat surprising to see the public pension funded status inch upward during April," said Becky Sielman, co-author of the Milliman PPFI. "By the end of the month, 25 plans were still more than 90% funded and 12 plans were less than 60% funded, the same breakdown observed in March—demonstrating that public pensions are well-positioned to withstand turbulent markets." Read this month's complete Public Pension Funding Index or Milliman's full range of annual Pension Funding Studies. To receive regular updates of Milliman's pension funding analysis, contact us at pensionfunding@ About Milliman Milliman leverages deep expertise, actuarial rigor, and advanced technology to develop solutions for a world at risk. We help clients in the public and private sectors navigate urgent, complex challenges—from extreme weather and market volatility to financial insecurity and rising health costs—so they can meet their business, financial, and social objectives. Our solutions encompass insurance, financial services, healthcare, life sciences, and employee benefits. Founded in 1947, Milliman is an independent firm with offices in major cities around the globe. Visit us at View source version on Contacts Becky SielmanMilliman, +1 860 687 Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Associated Press
3 days ago
- Business
- Associated Press
Milliman analysis: Public pension funding stable in April after plans end volatile month with slight market gain
SEATTLE--(BUSINESS WIRE)--May 30, 2025-- Milliman, Inc., a premier global consulting and actuarial firm, today released the latest results of its Public Pension Funding Index (PPFI), which analyzes data from the nation's 100 largest public defined benefit plans. Despite April market swings caused by trade and tariff uncertainty, the Milliman 100 PPFI plans closed the month with estimated investment gains of 0.4% in aggregate. Individual plans' estimated returns ranged from -1.8% to 1.4%. Combined, the plans added about $24 billion in market value during the period, rising to $5.213 trillion as of April 30. Meanwhile, the deficit between plan assets and liabilities was unchanged since March at $1.340 trillion. The PPFI funded ratio rose from 79.5% as of March 31 to 79.6% as of April 30. 'After significant market fluctuations caused by trade policy announcements, it was somewhat surprising to see the public pension funded status inch upward during April,' said Becky Sielman, co-author of the Milliman PPFI. 'By the end of the month, 25 plans were still more than 90% funded and 12 plans were less than 60% funded, the same breakdown observed in March—demonstrating that public pensions are well-positioned to withstand turbulent markets.' Read this month's complete Public Pension Funding Index or Milliman's full range of annual Pension Funding Studies. To receive regular updates of Milliman's pension funding analysis, contact us at [email protected]. About Milliman Milliman leverages deep expertise, actuarial rigor, and advanced technology to develop solutions for a world at risk. We help clients in the public and private sectors navigate urgent, complex challenges—from extreme weather and market volatility to financial insecurity and rising health costs—so they can meet their business, financial, and social objectives. Our solutions encompass insurance, financial services, healthcare, life sciences, and employee benefits. Founded in 1947, Milliman is an independent firm with offices in major cities around the globe. Visit us at View source version on CONTACT: Becky Sielman Milliman, Inc. Tel: +1 860 687 0125 [email protected] KEYWORD: WASHINGTON UNITED STATES NORTH AMERICA INDUSTRY KEYWORD: FINANCE CONSULTING PROFESSIONAL SERVICES INSURANCE HUMAN RESOURCES SOURCE: Milliman, Inc. Copyright Business Wire 2025. PUB: 05/30/2025 11:14 AM/DISC: 05/30/2025 11:13 AM
Axios
6 days ago
- Health
- Axios
Insurers warm to behavioral health in primary care
Insurers increasingly are paying for behavioral health services that are delivered in coordination with primary care, according to a new claims analysis from Milliman. Why it matters: The idea of coordinating mental health care with physical health care has been around since the 1990s. But Medicare billing codes adopted in 2017 have made such arrangements viable in both private and public insurance markets, the report shows. Context: The system, known as the collaborative care model, involves having a patient's primary care provider, behavioral health manager and psychiatric counselor create and carry out a mental health treatment plan. Traditionally, mental health care is delivered separately from physical health care, which can make it difficult to coordinate across providers. Studies have shown the collaborative care model improves outcomes, and there's also evidence that it can also reduce costs, per the report. Health systems began piloting the model using grant funding before Medicare introduced billing codes for the services. What they found: The number of Medicare Advantage enrollees receiving behavioral health services through the collaborative care model has increased eightfold since billing codes became available in 2017. About 2,600 MA beneficiaries got collaborative care in 2018, compared with 20,780 in 2022, Milliman found. The number of enrollees in traditional Medicare using the services grew more than five times over the same period. Medicaid uptake increased more than nine times, reaching 30,930 people in 2022. Growth in the commercial market has been significant, too: About 1,650 commercially insured people used collaborative care in 2018. That figure topped 27,440 in 2022, and nearly 36,600 in 2023. Yes, but: The growth of the model in a handful of cities across the country drove much of the national increase, the analysis found. In Madison, Wisconsin, 1,524 people out of 100,000 with commercial insurance got collaborative care services in 2023. That's compared with a national average of about 59 patients out of 100,000. Madison also had the highest participation in the country for traditional Medicare enrollees and the third-highest for Medicare Advantage. Arizona had the highest proportion of Medicaid enrollees using collaborative care among all states in 2022. Factors that helped growth in high-uptake communities include support from health systems, primary care physicians who champion the model, and philanthropic support for startup costs, said Anna Bobb, executive director of the mental health advocacy coalition Path Forward. What to watch: Bipartisan legislation introduced in Congress would increase Medicare reimbursements for existing behavioral health providers in collaborative care, which advocates say would boost access to the services. Zoom in: Milliman's analysis is based on Centers for Medicare and Medicaid Services data and the consulting firm's own dataset that together represent about 219 million people. Public payer data was available through 2022, and commercial market data through 2023.
