Much has been made of the ills of public and private pension plans — and hospital systems are no healthier. Modern Healthcare reports that the collective obligations of the 50 largest non-profit health systems’ pension funds grew faster than did their assets in 2014.
To be more exact, their obligations grew 19% in 2014 to $93.2 billion, while their assets grew by 11.1% to $75.3 billion. Further, their unfunded liabilities grew by 5 percentage points to 19% of their long-term obligations.
Greater longevity — with its consequent long period drawing from retirement funds — is part of the explanation, according to Pensions and Investments. Low interest rates that reduce the discount rates pension plans use to determine what they should invest in order to cover future pension expenses are also to blame.
To be more exact, their obligations grew 19% in 2014 to $93.2 billion, while their assets grew by 11.1% to $75.3 billion. Further, their unfunded liabilities grew by 5 percentage points to 19% of their long-term obligations.
Greater longevity — with its consequent long period drawing from retirement funds — is part of the explanation, according to Pensions and Investments. Low interest rates that reduce the discount rates pension plans use to determine what they should invest in order to cover future pension expenses are also to blame.
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