QOTD: Pension Refunding

Given the average life of a pension is about 15 years, every 100 basis point increase in interest rates reduces the net present value of pension liabilities by some 10%, writes Fundstrat’s Thomas Lee. If ten-year Treasuries can reach a 4% yield by the end of 2019, the pension funding ratio could therefore rise to 85%, up from 83% last year.  – Barron’s, March 12

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