A quarter of the 2017 Corporate Defined Benefit Plan Trends Survey respondents represent healthcare organizations. Please see below for a healthcare survey subset, highlighting the industry’s use of DB strategies and their market outlook.
Key takeaways include:
- A slight uptick in the percentage of healthcare organizations using liability-driven investment (LDI) strategies, from 53% in 2016 to 56% in 2017. However, the percentage of healthcare companies considering LDI declined significantly, from 21% to 9% over the past year. More than half (62%) of healthcare respondents said they are waiting for interest rates to rise before implementing LDI.
- An increase in healthcare companies issuing debt to improve funded status. In 2016, just 2% of healthcare respondents said they plan to issue debt; in 2017, that figure grew to 10%. All the respondents planning to issue debt reported funded status under 80%. Furthermore, the percentage of healthcare organizations that considered but rejected issuing debt rose from 37% in 2016 to 45% in 2017.
- Continued optimism among healthcare organizations for a bullish stock market. Sixty-two percent of respondents reported feeling bullish over the next twelve months, on par with 2016 respondents (63%) and a substantial increase from 2015 (42%).