YWCA Retirement Fund celebrates 100 years of empowering women through financial security

Few retirement funds can say they've maintained an overfunded status for 100 years. The New York-based YWCA Retirement Fund, which reaches its centennial this year, has managed to do just that.

The YWCA retirement fund launched in 1925 with a $1.8 million donation from John D. Rockefeller. Rockefeller’s wife, Laura Spelman, was active within the YWCA movement and other nonprofits dedicated to furthering social causes — particularly those that educated and elevated women.

At the time, just five years after the ratification of the 19th Amendment, which gave women the right to vote, women faced significant economic barriers that made it difficult for them to save for retirement. The YWCA Retirement Fund was established as a so-called secretary plan which used the donation and further contributions from the YWCA to offer pension benefits to YWCA career staff. A majority of plan participants have been women since the fund’s inception and today that figure is 90%. There are about 4,400 active employees and 1,600 retirees and beneficiaries currently.

The plan remained largely unchanged until 1974, when the Employee Retirement Income Security Act was enacted and the board adjusted its vesting rules and disclosures to ensure compliance with the new law. At that time, the plan changed from a secretary plan to a cash balance defined benefit plan. The plan updated its rules slightly in the 2000s to add portability for participants and to comply with the Pension Protection Act of 2006.

“In 2000, the plan became far more portable,” explained Elliott Buchholz, CEO at the YWCA Retirement Fund. “It used to be very traditional, where participants’ accounts were locked in. Once you had a certain balance, at least half had to be taken as a pension. You could take some money as a distribution, but a pension was locked in. There was a decision at the time to move away from that. We still offer a valuable pension that we believe is better than what they could buy on the market, but the money becomes fully portable at whatever point in time you stop working.”

OCIO selection

In 2016, the fund decided to modernize further and started looking for an OCIO. The fund grew to $360 million in 2018 and totaled $386 million at of the end of 2024.

Barbara Glass, who leads the investment committee, said that the fund had wanted to expand what it invested in, but managing the due diligence in house was not practical.

The fund has a staff of 18 people and not all of them are in investment functions. Some members of the investment committee were also near retirement themselves. The fund brought on two new committee members with recent investment experience and interviewed a number of OCIOs. The goal, Glass says, was to find a firm that would be able to serve their unique membership and provide a diversified offering.

According to Glass, the fund is the only one she knows of that has majority women participation, which changes the actuarial tables for the annuity benefit.

Typically, annuity calculations are done using both sexes. Women have a tendency to live longer than men. The fund calculates for women only in its actuarial tables. Each association chapter also has its own unique financial situation and staff so those differences have to be accounted for when considering the big picture of the fund. The fund ended up going with Strategic Investment Group after a competitive selection process.

"We didn't want to put the associations in a position where they needed to increase contributions to make up a deficit in the funds,” Glass explains. “We intentionally stay well above the funded level; we like to be at least 120% to ensure there is always enough."

The fund and Strategic worked together to create a set of target allocations that expanded the portfolio from what was a fairly traditional mix of bonds, equities and cash to include private equity, hedge funds, opportunistic strategies, real assets and private credit. This mix has defined the portfolio since 2018 and has supported the fund in maintaining its overfunded status.

The investment committee does a full annual review of the portfolio along with interim quarterly reviews where they discuss Strategic’s allocation recommendations and overall positioning. Buchholz says that the committee has changed its investment policies in response to market moves twice since beginning the relationship with Strategic. The firm was signed on in 2017.

Glass adds that they have established ranges for their allocation targets which allows them a bit more room to maneuver when markets change. When markets were reacting to the COVID-19 pandemic, for example, they repositioned the portfolio to better withstand market volatility, but stayed within the allocation ranges that they’d previously established. They’ve maintained this approach through recent market volatility as well.

"We have rather extensive discussions at our board meetings and investment committee meetings both internally and with Strategic about any potential allocation changes or issues that are happening in the market,” she said. “We talk through what we think the best allocation is going to be within our ranges at any given time.”

Adding alternatives has given the fund the opportunity to take a bit more risk and get paid for it. And, Buchholz says, it’s been positive for the fund to have more ways to adjust its positioning in response to market moves. While the investment portfolio is now more dynamic, Buchholz emphasizes that the investment committee is still heavily focused on risk management. He says finding the right mix of investments with higher returns that aren’t overly risky is a bit more art than science.

"At the end of the day we can only take so much risk. We have to walk that balance, because if we take no risk, we're not going to make the money we need to make to pay what we need to pay,” Buchholz says. “But if we take too much risk, then you're playing a dangerous game with spoken-for money. But it is a tightrope we have walked successfully for 100 years."

The YWCA has recently added a 403(b) option for staff who want to put money toward something self directed, a move which Buchholz says has helped them with recruiting.

Staff can get started in the 403(b) while they wait out vesting into the defined benefit plan. This has been popular with staff who join the YWCA from other senior roles and want to avoid a gap in their retirement savings. The fund is also making ongoing improvements to its online retirement portal. Buchholz is leading an internal communications effort to help the associations and plan participants stay on top of their retirement savings.

"With our plan, people can make a career at the YWCA and retire comfortably with a benefit that will provide a level of safety and dignity as they age,” Buchholz says. “That's our primary driver. That hasn't changed in 100 years and we don't expect that it will change."