Many corporations have not moved to derisk their pension plans, leaving them vulnerable to widening funding deficits if equity markets and interest rates decline, according to asset management strategists.
U.S. institutional tax-exempt assets under management by the largest 500 managers reached $13.22 trillion at year-end 2013. That 13.9% gain finally put the assets above the pre-financial crisis peak of $12.42 trillion at year-end 2007.
If recent regulatory filings are any indication, large exchange-traded fund transactions are increasingly commonplace among North America's largest pension funds and endowments. Yet, for any holding period, returns can be significantly influenced by factors beyond the index return and the expense ratio.
Speculation abounds that the London Stock Exchange Group PLC is on the verge of making the biggest acquisition in its 213-year history with a potential deal to buy Russell Investments, allowing the LSE to gain a bigger U.S. foothold.
Money managers watching the Financial Stability Oversight Council grapple with systemic risk breathed more easily after being given a chance at a recent Washington conference to explain what they do. Still, they're not letting down their guard or putting away potential weapons just yet.
A growing number of large pension risk transfer deals in the U.K. and U.S., coupled with an anticipated influx of deals across both markets, have left industry executives split over the potential for a capacity crunch.
While executives working in the risk transfer market argue over whether a capacity crunch is approaching, they agree on one thing: Recent changes to the U.K. pensions market could encourage new players to the bulk annuity market.
In addition to the inflation-sensitive assets option and multimarket risk-parity option added to United Technologies Corp.'s investment lineup, here's a look at the rest of the menu for the companies' two 401(k) plans.
Institutional investors increasingly have been demanding both more transparency and more of a dialogue over how their assets are being invested and portfolios are being constructed and the pace at which asset owners want more of a dialogue with their asset managers is continuing to rise.
Eleven member countries of the European Commission are planning to introduce a financial transactions tax in 2016. If it takes effect as planned, the tax could cost pension funds, not only in Europe but also in North America, billions of dollars every year.
With widespread improvements in pension plan funded levels reported for U.S. corporations, it was alarming to learn the Tennessee Valley Authority's pension plan was only 63% funded at the end of its fiscal year Sept. 30.