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Pension Funds

Median fund in Wilshire TUCS posts 2.63% quarterly return

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The median return for pension plans as tracked by Wilshire Trust Universe Comparison Service was 2.63% for the third quarter, up from the median return of 0.88% for the second quarter.

Taft-Hartley defined benefit plans posted the highest median quarterly return in Wilshire's universe at 3.09%; followed by public DB plans 2.89%; foundations and endowments, 2.78%; Taft-Hartley health and welfare funds, 2.24%; and corporate DB plans, 2.16%.

"Despite headwinds in bonds due to a significant rise in interest rates late third quarter, exposure to U.S. equities clearly helped support plan performance," said Jason Schwarz, president of Wilshire Analytics and Wilshire Funds Management, in a news release on the results. "The recent mix of strong U.S. economic indicators and generally strong earnings results has continued to help drive U.S. equity returns higher."

For the year ended Sept. 30, the TUCS universe returned a median 6.9%. Taft-Hartley DB plans also posted the highest median return for the 12-month period at 8.24%; followed by public DB plans, 8%; foundations and endowments, 7.24%; Taft-Hartley health and welfare funds, 4.97%; and corporate DB plans, also 4.97%.

By asset class, the Wilshire 5000 Total Market index posted quarterly and one-year returns of 7.27% and 17.6%, respectively. The MSCI ACWI ex-U.S., meanwhile, returned 0.71% and 1.76% over those periods, respectively, and the Wilshire Bond index, 0.48% and -0.73%.

The overall master trust median allocations to U.S. equity and U.S. fixed income were: 42.66% and 26.44%, respectively. Public plans had a median 44.7% allocated to U.S. equities and 22.56% to U.S. bonds as of Sept. 30; foundations and endowments, 42.23% and 23.46%, respectively; Taft-Hartley DB plans, 46.84% to U.S. equities and 22.56% to U.S. bonds; and corporate DB plans, 34.28% to U.S. equities and 33.96% to U.S. bonds.

Longer term, for the three, five and 10 year periods ended Sept. 30, the TUCS universe returned a median annualized 9.26%, 7.26% and 7.91%, respectively.

Wilshire TUCS includes more than 1,000 plans with more than $3.8 trillion in assets combined.