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…
Capital MarketsNGIPension and Benefits
March 5, 2020

Actuarial Agony: Falling Interest Rates and the Plight of Pension Fund Managers

Private equity helps matters, but track records of outperformance don’t sway actuaries. Falling interest rates are pushing down the expected return on assets (EROA) at pension funds, an unwanted development for all managers and especially aggravating, perhaps, for those who have historically been able to outperform expectations. That was among the takeaways from a recent NeuGroup pension roundtable. Blame it on the actuaries. The pension fund manager at a major media company maintained an EROA of 7.5% over the last…
Capital MarketsPension and BenefitsRisk Management
February 25, 2020

No Slam Dunk for Pension Fund Managers: Selling Leverage-Averse Boards on Overlays

The popularity of overlays is increasing in the US despite concerns of executive committees. Leverage is something of a dirty word in the world of pension funds and that, perhaps, presents the biggest challenge that pension fund managers face when seeking to persuade their companies’ executive committees to use overlays that use derivatives as a fund-management tool.At a roundtable of pension fund managers arranged by the NeuGroup, one participant said his team had begun to explore how to “de-risk” the…