Pension plans’ funding rose a mere 70 basis points last year, according to Goldman Sachs Asset Management.
J.P. Morgan’s “Corporate Pension Peer Analysis 2018,” says 2018 was the largest asset allocation de-risking year for defined benefit (DB) plans since 2011.
The lawsuit claims owners of Freedom Communications made ill-advised, highly speculative investments which caused the pension plan to lose tens of millions of dollars.
Mercer recommends 10 areas of focus for defined benefit plans in 2019.
Willis Towers Watson offers 10 investment actions for DB plans in 2019.
Vanguard research explains how CITs and mutual funds are just as beneficial.
“A cap-weighted strategy skews its way toward the largest stocks, but if plan sponsors own equities in a much more balanced way, it will help with stability,” says Bryan Belton, director, multi asset, at PanAgora Asset Management.
Corporate DB plans have experience funded status improvement, and LDI strategies help plan sponsors preserve this; however, investment committees are looking for new asset classes that can provide greater returns at a reasonable level of risk.
As more marketable obligations—such as those for in-pay retirees—are transferred to insurers, residual DB plans will have unusual and idiosyncratic features that make them more difficult to manage, which will drive pension investing to a “hibernation” focus for many, Mercer says.
Alexi Maravel, director of Cerulli’s institutional practice, observes that the LDI topic is “probably the most competitive pricing environment among the different types of institutional custom solutions available today.”
“The takeaway is critical: it pays to remain patient,” the researchers wrote.
Mercer offers its list of key priorities for defined benefit (DB) plan sponsors for 2018.