Perspectives Blog

Slow growth: Why is it here and will it stay?

February 24, 2014

…of slower growth and lower inflation have largely been in place for some time. Some point to growing income inequality, while others lay blame on a liquidity trap for monetary policy. Still others see the unrelenting swing of demographics as the culprit, or globalization and technological advances that have slowed inflation and at the same time displaced workers. Many choose not to believe it at all, underscoring a historic output gap that is onl…

How plan sponsors can plan for the coming changes to mortality tables

Thomas Egan, Actuary, Liability Driven Solutions Team | September 22, 2014

…ting purposes • Increase PBGC risk-based premiums • Increase contribution requirements • Increase the value of lump sum payments The degree to which the mortality tables will affect funded status depends on the pension plan’s demographics. Factors such as female vs. male concentration, blue collar vs. white collar employees, and age distribution of plan participants will determine how a plan is affected by the adoption of a new mortality table. E…

Another look at disability and labor force participation

Zach Pandl, Portfolio Manager and Strategist | April 7, 2014

…decline in participation. By comparison, retirements account for about 45% of the decline in the participation rate since 2007. Academic research points to three broad explanations for the growth in the disability share: 1. Demographics. An aging population puts upward pressure on the disability share because disability is more prevalent among older workers. Thus, there has been a natural tendency for disability claims to increase as baby boome…

Retirement plan design for the new tax regime

Abram Claude, Vice President, Columbia Management Learning Center | October 2, 2013

…cash balance defined benefit plan using a new comparability model as well. Of course before implementing any plan, Lou would want to discuss plan design strategies with his tax professional, taking into consideration employee demographics, as well as the costs of maintaining a workplace retirement plan. Related reading: Strategies for business owners to reduce net investment income tax Next in this series: Trust accounts and net investment incom…

Neutral funds rate going up?

Zach Pandl, Portfolio Manager and Strategist | May 16, 2014

…at the supporting evidence for both of these points is too backward-looking. Potential growth has been low, but that need not last forever. Based on history, trend growth of 1% is very unusual for an economy with current U.S. demographics. Likewise, many of the headwinds that have depressed the Laubach-Williams estimate—fiscal tightening, household deleveraging, the European financial crisis—are temporary in nature. The model’s estimate of the eq…

Specialty pharmaceuticals – The fastest growing category of healthcare spending

Harlan Sonderling, CFA, Senior Healthcare Analyst | January 27, 2014

…rating pace of change and disruptive therapeutic advances create significant opportunities across healthcare delivery. The imperatives for care delivery in more cost-effective settings, driven by serious public health issues, demographics and increased consumerism, are compelling the rapid transition from fee-for-service to outcomes-based payments. There are large financial incentives for innovative therapeutics and service companies across speci…