Capital MarketsPension and Benefits
December 17, 2020

Dial It Down: Pension Fund Managers Cope With Lower EROAs

Key takeaways from a NeuGroup for Pension and Benefits meeting sponsored by Insight Investment and BNY Mellon.Pension fund managers discussed best practices in selecting and evaluating investment managers, asset allocation and the impact of lower estimated return on assets (EROA) among other topics at a virtual meeting sponsored by Investment Insight and BNY Mellon. Here are takeaways from the gathering compiled by Roger Heine, senior executive advisor at NeuGroup. EROA expectations. Two-thirds of members are facing the reality that low interest…
Pension and BenefitsRisk Management
November 24, 2020

Pension Puzzle: Insights for Managers Putting the Pieces Together

Willis Towers Watson weighs in on WACC, the efficient frontier and pension financing alternatives.Pension fund managers evaluating alternative funding strategies should not necessarily use their companies’ weighted average cost of capital (WAAC) as a discount rate; the risks of the pension should be viewed differently than a normal project investment considered by the company. That was among the key takeaways from a recent NeuGroup Virtual Interactive Session sponsored by Willis Towers Watson, “Relative Value: Pension De-risking in a Post-Covid World.”…
Investment ManagementPension and BenefitsRisk Management
November 3, 2020

Walk Before You Run: Using Derivatives in Pension Funds

The value of educating stakeholders on why using derivatives can make sense.During a recent NeuGroup for Pension and Benefits session sponsored by Insight Investment and BNY Mellon, a pair of members shared their knowledge and experience using derivatives in managing corporate pension plans. Two highlights: “Walk before you run” emerged as a key piece of advice to members, most of whom do not make extensive use of derivatives.Educating stakeholders including finance committees, C-Suite executives and accountants on derivatives and their…
ESGPension and BenefitsTalking Shop
November 3, 2020

Talking Shop: How to Respond to a New Rule on ESG Funds in 401(k) Plans?

Context:  On Friday, Oct. 30, the Department of Labor (DOL) issued a final rule clarifying the use by fiduciaries of investments in environmental, social and governance (ESG) funds. The regulation, according to some analysts, will end up limiting the use of ESG funds by some 401(k) and pension plans. Proposed in June, the change was opposed by many asset managers and investment advisors; DOL says the final rule was changed in response to comments. Member question: “Has anyone thought about…
Capital MarketsCOVID-19Pension and Benefits
August 27, 2020

Wild Ride: Pension Fund Managers Describe a Rebalancing Roller Coaster Amid Pandemic

NeuGroup members discuss successes, disappointments and potential changes to strategy. Huge market swings, limited liquidity and high trading costs have tested the ability of corporate pension fund managers to rebalance portfolios during the pandemic. These challenging conditions have demonstrated the importance of speed and agility to make investment changes in times of crisis, and have forced some managers to take a hard look at asset classes and external managers. These and other insights emerged during a recent NeuGroup Virtual Interactive…
Investment ManagementPension and Benefits
July 7, 2020

Do Pensions Need to Bolster Post-Retirement Resources?

Pension managers could be doing a better job of guiding retirees with their post-work pension planning.For decades, defined contribution (DC) retirement plans have helped address the needs of individuals leading up to retirement. However, plan sponsors have made little progress in addressing individuals’ needs during retirement itself, according to Insight Investment, a sponsor of the NeuGroup for Pension and Benefits’ recent meeting. Retirement anxiety. There is a lot of unease for employees on the verge of retiring, as they worry about funding their non-working lives. It…
Pension and Benefits
June 30, 2020

European Pensions Ride the ESG Bandwagon. Will US Plans Catch Up?

In Europe, ESG is gaining traction in pension funds while it still lags a bit in US; raters also need to standardize. While many observers thought environmental, social and governance (ESG) issues would take a back seat amid the pandemic, the opposite has happened, with treasury practitioners—at least in NeuGroup’s universe— seeking more information. Still, as members of the NeuGroup for Pensions and Benefits (NGPG) were told in a virtual meeting in May, it depends on where you are.  How important?…
Pension and BenefitsRisk Management
June 23, 2020

Pandemic Creates Too Many Unknowns to Change Pension Strategies

Pension managers struggle with strategy amid a pandemic pace unlike the drawn-out financial crisis. Rapidly changing conditions during the pandemic have made it extremely difficult for many NeuGroup members and other treasury practitioners to create forecasts and devise strategies. Pension fund managers are in the same pickle, finding it nearly impossible to change their overall pension strategies given how fast the landscape is shifting. This is a far different predicament than during the 2008-09 financial crisis, which was a slow-moving disaster.“The…
Pension and BenefitsRisk Management
June 18, 2020

Pensions Look for Re-Entry, Re-Risk Opportunities

Pension managers were de-risking at the end of 2019, much to their relief months later; now it’s time to add some risk.Although pension managers have been de-risking over the course of the last several months – and continue to do so in different areas – many are now on the hunt to re-enter the market to re-risk. “Can we be nimble enough to pounce given the opportunities that are out there?” wondered one member of NeuGroup’s Pension and Benefits (NGPB)…
Crisis Team
Pension and Benefits
May 26, 2020

Founder’s KTAs from NeuGroup for Pension and Benefits 2020 H1 Meeting

By Joseph Neu The NeuGroup for Pension and Benefits 2020 H1 meeting took place last week, sponsored by BNY Mellon and their subject matter expert Insight Investment.  Here are a few takeaways I wanted to share:  Interregnum part 2. Insight Investment CEO Abdallah Nauphal put the Covid-19 crisis into the context of his thesis presented last October that the world is in an interregnum period between the financial-economic system that emerged from World War II and what comes next. Covid-19 is…