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Is QE the death of DB? S&P tells Pensions Today that reigning in pension plan deficits will be a huge challenge for companies over the coming years

PW photoIt is the view of Paul Watters, Senior Director at Standard & Poor’s Ratings Services, that recent economic developments are causing the funding conditions for corporate defined-benefit (DB) pension plans to deteriorate. He explores this view in this month’s edition of Pensions Today, in which he points out that such pension schemes in Europe are particularly vulnerable. And with stimulus action from central banks – via Quantitative Easing (QE) – running the risk of doing nothing more than promoting stagnation in the area, Watters argues that “the challenge for companies in the coming years will be how to rein in plan deficits in the new post-QE low interest rate environment.” This especially important as liabilities will increase by 11%-18% in 2014 – and are set to climb even further this year.

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