NEPC’s Jake Mallinson was quoted in a recent FundFire article to discuss where most defined benefit plan investors plan to allocate their assets, according to our latest Defined Benefit Trends Survey. View the article on FundFire’s site here.
Corporate pensions are prioritizing funded status protection rather than return maximization amid fears of a market downturn, according to a report published by NEPC in November.
The consulting firm interviewed 51 companies and healthcare organizations with defined benefit plans ranging from $100 million to more than $300 billion in size about their market sentiment and liability-driven investments, or LDI.
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“The increase in fixed income returns, especially for defined benefit plans that have large allocations to fixed income, saw that big jump in expected return on assets,” said Jake Mallinson, a consultant at NEPC.
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Long duration corporate or Treasury bonds are the most popular LDI instruments, according to the report.
“That shift in investing is really looking to de-risk the portfolio over time and lock in those funded status gains,” Mallinson said.
Read the full article on FundFire’s website here.