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Taking Stock: NEPC's April 2020 Pension Monitor

May 5, 2020 / by NEPC

Download NEPC's Pension Funded Status Monitor

NEPC’s monthly pension funded status monitor tracks the funded status of two hypothetical plans to gauge the impact of movements in markets, interest rates, and credit spreads on pension plans. The funded status of a corporate pension plan was generally flat in April, with allocation affecting individual results. Funded status was boosted by the rebound in equities and credit spreads after a volatile first quarter. However, liabilities increased
significantly. Therefore, the funded status for a typical total-return plan decreased by around 0.4%, while an LDI-focused plan improved by 0.9%, according to NEPC's hypothetical open- and frozen-pension plans.

The funded status of the total-return plan fell by 0.4% as the growth in liabilities outpaced the rebound in equities, which bounced back from their lows in March as markets grappled with the fallout from the COVID-19 pandemic.

The LDI-focused plan experienced an increase in funded status of 0.9% mostly due to the recovery of risk assets after their sharp drop in March. The plan is currently 75% hedged, as of April 30.

Topics: Blog, Corporate Defined Benefit, Taking Stock

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