However, the performance difference over the last 12 months and last 10 years has been consistently in the other direction, with median returns of large Taft-Hartley plans besting those of small Taft-Hartley plans for seven out of the past 10 years. The 10-year median returns for large and small plans are 8.19% and 7.13%, respectively.
Wilshire Consulting says the difference might be due to the fact that large Taft-Hartley defined benefit plans continue to be more likely to invest in alternatives and have a larger exposure to equity-like assets.
Ninety-four percent of large Taft-Hartley plans are invested in alternative investments, with a median allocation of 12.9%, while only 27% of small plans are invested in alternatives, with a median allocation of 5.1%. Real estate shows a similar trend, with 81% of large Taft-Hartley plans with an allocation to real estate compared to 44% of small plans. In addition, 92% of large plans with real estate investments also had exposure to other alternative investments, while only 36% of small plans invested in real estate had exposure to other alternative investments.Looking at overall asset allocation, large Taft-Hartley plans also invest in more equity-like assets than small plans, at 72% and 61%, respectively. Large Taft-Hartley plans have less allocation to U.S. equities but significantly more exposure to international equities and alternative investments.
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