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Stock Market Gains Help Pension Funding Levels: Pension and Group Annuity Update

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Corporate bond interest rates fell a little in November, but the stock market did well, and that helped make the finances of big U.S. corporate pension plans look better, according to Milliman Inc.

Zorast Wadia and Charles Clark, analysts at the Seattle-based actuarial consulting firm, found that the 100 large corporate pension plans they track reported a $272 billion combined deficit in November on $1.98 trillion in pension benefits obligations, compared with a $284 billion deficit on $1.915 trillion in pension benefit obligations in October.

Overall funded percentage increased to 86.2%, from 85.2%.

(Related: Nationwide Adds In-Plan Group Indexed Annuity: Pension and Group Annuity Update

The plans generated a 5.03% investment gain in November, the analysts reported.

In other pension plan and group annuity news:

AIG Retirement Services, a unit of American International Group Inc. of New York, has established a Total Retirement Services program.

The program combines administration and recordkeeping for 401(k) plans and other defined contribution plans with administration of traditional defined benefit pension plans.

AIG says the new program gives the plan participants a simplified look at how much money they may have in retirement, through a single website and mobile app and comprehensive account statements.

Participants also can call a toll-free call-center and talk to financial professionals with access to information about both their pension plans and their defined contribution retirement plans, AIG says.

AIG has developed the new program with help from Findley, a division of USI.

Massachusetts Mutual Life Insurance Company, a life insurer in Springfield, Massachusetts, has agreed to sell a large group annuity to The New York Times Companies Pension Plan. The plan wants to use the annuity to transfer $235 million in traditional defined benefit pension plan obligations to MassMutual.

The pension risk transfer deal involves pension benefits for 1,850 retirees and beneficiaries.

The New York Times Company says it expects to take a non-cash pension settlement charge of about $80 million to $85 million in connection with the transaction.

TIAA, a life insurer in New York, says it recently signed its 100th client for its TIAA RetirePlus Series qualified default investment alternative program.

The program provides model portfolios for use in defined contribution retirement plans. The portfolios come with an annuitization option.

— Read Nationwide Enters Pension Risk Transfer Annuity Marketon ThinkAdvisor.

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