Report : Asset Management | April 20, 2023

Corporate pension trends 2023

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While negative returns across global equity and long duration fixed income caused asset values to fall in 2022, the news wasn’t all bad for corporate pension plans. Median funding levels increased slightly, enabling plan sponsors to continue their derisking strategies. Learn more about how plan sponsors are managing pension risk in our Corporate Pension Trends 2023 report. 

2022 yielded mixed results for corporate pension plans

For Corporate Pension Trends 2023, we analyzed defined benefit pension data from 350 corporations. Key findings include:

  • Funding status. Significant increases in corporate bond interest rates decreased liability values. This decrease was enough to offset negative returns from equity and fixed income. As a result, funding status increased by about 1%.
  • Misperception of risk. Vanguard’s 2022 Pension Sponsor Survey shows that 91% of plan sponsors reported a funding status risk tolerance of 10% or less, while only 16% have an asset allocation that actually aligns with that target. The contrast between perceived and actual risk points to the need for better alignment of the plan’s asset allocation with its stated risk tolerance.
  • Derisking strategies. Increased funding status allowed for further movement along derisking glide paths, as investments were reallocated from equity to fixed income. Annuity purchases increased significantly from 2021, as pension risk transfer activity reached a historic high of $52 billion.   

Managing risk for your pension plan

Plan sponsors and their investment committees don’t need to make risk and asset allocation decisions alone. Pension investing is complex, and an outsourced chief investment officer (OCIO) can handle the complexities of managing the plan’s investment portfolio. With more than 25 years of experience, Vanguard’s OCIO for pension services can help plan sponsors determine the best solution to the plan’s risk/allocation question.

For additional insights from our experts, explore our pension resources.




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