How Inflation Impacts Plan Design and Funding
In this CCA retirement series webinar speakers discuss the importance of understanding the effects of inflation on investment return, payroll growth and a defined benefit plan’s funding level. Inflation has averaged a little over 3% over very long periods but has been much higher in 2022. To the extent that higher inflation leads to higher payroll growth, it can cause retiree liabilities to be a smaller portion of total liabilities and smaller relative to payroll than they would be if there were less inflation. This can be a downward driver on plan funding requirements.
Judith A. Kermans
Mr. Brian B. Murphy
Todd David Kanaster