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Rising interest rates may bring higher pension costs for companies

wsj

3 min read . Updated: 15 Feb 2023, 05:31 PM IST Jennifer Williams-Alvarez, The Wall Street Journal

High interest rates are generally good for pensions because they bring liabilities down and improve funded status, said Matt McDaniel, a partner at consulting firm Mercer LLC who advises companies on pension risk and strategy (Photo: AP) — High interest rates are generally good for pensions because they bring liabilities down and improve funded status, said Matt McDaniel, a partner at consulting firm Mercer LLC who advises companies on pension risk and strategy (Photo: AP)

From Delta Air Lines to Sysco, companies face higher expenses as they start to account for higher interest on pension obligations

Rising interest rates have boosted corporate pensions, with funded status reaching a 20-year high in the second half of last year. But rising rates may not prove so kind to companies, from Delta Air Lines Inc. to Sysco Corp., and their pension costs this year.