Taking Stock: NEPC's October 2022 Pension Monitor

Corporate pension plans recorded significant gains in funded status in October amid rising discount rates and rallying equities. The Treasury yield curve rose and remained inverted between the one- and 10-year tenors as investors continued to grapple with the Federal Reserve’s hawkish stance and its impact on economic conditions. Total return plans outpaced LDI-oriented plans due to positive equity returns and a lower hedge to rising discount rates as Treasury rates ticked up. NEPC’s hypothetical pension plans witnessed a funded status gain of 10% for the total-return plan compared to 3.6% for the LDI-focused plan.