New Trends for Largest Corporate DB Plans Identified

Despite a lack of radical developments, there were some new trends among the 20 largest corporate defined benefit plan sponsors in 2015, says asset management firm Russell Investments.

There was no predominant trend concerning DB plans last year, says Russell, and funded status was largely unchanged. Still, Russell’s research identified several trends:

• more than half of the plans it studied calculate pension costs in a new way, either through a mark-to-market or full yield curve approach;

• contributions to plans fell by more than 50% from 2013 to 2015;

• portfolio assets allocated to fixed income, which averaged 33% in 2010, now are more than 40%; and

• there is a shift to liability-hedging assets — 17 of the 20 specifically state investment objectives that account for risks related to liability.

Assets held by the 20 largest corporate DB plan sponsors top $700 billion, according to Russell.