Welcome to our exchanges at Goldman Sachs Markets Update for Friday, March 19th.

Each week we check them with a leader across the firm to get a quick take on what they're watching in markets.

This week we're looking at how the rising interest rate environment has affected corporate pension

plans and what that means for participants in those plans. I'm Jake Seward, Global Head of Corporate Communications

here at Goldman, and today I'm joined by Mike Moran, senior pension strategist in Goldman Sachs's

Asset Management Division.

Mike, welcome back to the program.

Thanks, Jake. Good to see you.

So you every year do a study on pensions.

This is its 19th year, which is remarkable.

And the study this year revealed yet another year when funded levels didn't really change that much despite strong financial asset returns last year.

So in 2021, asset levels are again rising quite dramatically. What have

you found so far in your research this year? So Jake we have completed our annual

review of US corporate pension plans and 2020 was another year when

financial asset returns were very strong yet funded levels didn't really rise

with both equity and fixed income markets delivering strong returns last year,

many plans posted actual asset returns across their entire portfolios of around 12 to 16 percent,

so quite strong. Yet despite that, many plans actually saw their funded status fall last year

and for some that did post a year over year increase,

it was only due to a large contribution that was made by the sponsor and the main

factor causing this dynamic of strong asset returns yet funded status not improving is that

low interest rate environment that increased the value of pension liabilities.

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