DB Plan Sponsors Choose Lower Volatility over Higher Returns

An SEI news release said nearly two thirds (62%) of those polled said decreasing volatility in their investment portfolios while maintaining current returns was a higher priority than increasing returns while maintaining current volatility.  The sentiment was most prevalent in larger U.S. plans (those with over $1 billion in assets), with 76% saying their organization would not be willing to take on more active risk in an effort to increase returns.

More than half (53%) of poll respondents said monitoring the risk of plan investments has increased in complexity (up from 41% last year), and 45% said ensuring compliance with pension related laws has become more challenging, the release said. More than 80% of those polled indicated the responsibility of monitoring governance risk falls on investment committees and executive management, up from just over half last year.  

Slightly more than two-thirds of respondents said their plan was above the requisite 90% funding level — a drop from the more than three quarters who said the same last year.  

The poll, administered by SEI’s Pension Management Research Panel, was completed by 305 executives in Canada, Hong Kong, Netherlands, United Kingdom and United States overseeing pensions ranging from $30 million to over $5 billion in assets.  

A complete summary of the poll is available by emailing seiresearch@seic.com .