Press Releases

BOSTON–(BUSINESS WIRE)–NEPC, LLC, one of the largest independent, research-driven investment consulting firms, today announced that former Aon executive Bill Ryan joined the firm as Partner and Head of Defined Contribution (DC) Solutions, effective November 1.

In the newly created role, Ryan helps lead the way NEPC serves DC plan sponsors, ensuring the firm’s solutions address challenges like governance model support, operational risk management, and using participant level data to enhance plan design.

“While their teams and resources have decreased, plan sponsors today face increasingly complicated challenges,” said Craig Svendsen, NEPC Partner and Corporate Practice Director. “Bill will help us more efficiently deliver the strategic, innovative solutions our clients need. As plans evolve, we’ll always stay a step ahead to prepare our clients for what’s next.”

Prior to joining NEPC, Ryan was Head of North America DC Multi-Asset Solutions at Aon where he advised 21 of Pensions & Investments’ (P&I) top 100 DC plan sponsors and was entrusted with more than $800 billion in retirement savings for 60 million participants. He also led the firm’s Custom DC Solutions Team, which was responsible for over $500 billion of bespoke solutions.

“Joining NEPC allows me to build on its foundation of over 200 DC clients to create and deliver tailored, innovative solutions that address their unique needs,” said Ryan. “I’ll be focusing on helping clients effectively use plan data to evaluate investment efficiencies and expanding NEPC’s retirement income solutions expertise. Sponsors deserve the independence, innovation, and commitment that NEPC delivers.”

Ryan is an Executive Committee member and Chair of the Investment Policy and Design Committee for the DC Institutional Investment Association. He has received several P&I Eddy Awards as plan sponsor, was named a 2020 Power Broker in Employee Benefits as an investment consultant by Risk & Insurance Magazine, and was a 2013 finalist for PLANSPONSOR’s Plan Sponsor of the Year.

Learn more about NEPC’s Defined Contribution Team here.

ABOUT NEPC, LLC

NEPC is an independent investment consultant and private wealth advisor, serving over 400 retainer clients and $1.4 trillion in total assets. Combining a proprietary research team dedicated to the long-term challenges facing investors with our unique client-centric model, NEPC builds forward-looking investment portfolios for institutional investors and ultra-high-net-worth individuals. To learn more about NEPC, visit nepc.com.

BOSTON–(BUSINESS WIRE)–NEPC, LLC, one of the industry’s largest independent, research-driven investment consulting firms, today announced the key trends from its benchmark Defined Benefit Plan Trends Survey, which examines historical trends and health of corporate and healthcare pensions. 2021 marks the 10^th anniversary of this survey.

The results, to be released in January 2022, highlight three significant trends over the past decade:

• Pension funded status has improved dramatically. In the inaugural 2011 survey, only 13% of plans had a funded status above 100%. In 2021, that number rose to 31%
• Plan sponsors have increased their LDI allocations. Only 9% of pensions had an LDI allocation above 51% in 2011. In 2021, 42% of pensions had an LDI allocation above 51%.
• Shifting asset allocations coupled with the strong market environment materially reduced expected return on assets (EROA). In 2011, 100% of respondents had an EROA assumption above 7%. By 2021, only 29% of respondents reported an EROA expectation above 7%.

In terms of results, 2021 was a record year for glide path triggers as 61% of respondents hit a glide path trigger – compared to 18% in 2019, 34% in 2017, and 16% in 2016. This increase was driven by higher Pension Discount Rates (PDR) in Q1 and strong equity returns – 89% of respondents said their trigger was caused by market movements.

With regards to other topics, ESG adoption continued to grow (albeit slowly) but interest appears to have waned. Respondents in this year’s survey who have not adopted ESG say they are less likely to consider ESG in the future.

56% of the 2021 respondents expect PDR to increase in the next year, driven by concerns around inflation and the current low rate environment. Despite this outlook, 56% expect strong equity returns over the next year while 75% indicate a less than 50% probability of a market correction in the next six months.

2021 saw an uptick in plan termination considerations compared to 2019. 20% of sponsors with a closed or frozen plan indicated they were planning a plan termination, compared to 17% in 2019. Additionally, more plan sponsors (33%) considered a termination in 2021 but eventually rejected, compared to 23% in 2019.

“If funded status continues to increase and discount rates rise, we may see more plan sponsors revisit the merits of annuitization,” said Brad Smith, Partner at NEPC and member of the firm’s Corporate Defined Benefit Team. “Half of plan sponsors in NEPC’s 2021 survey looking to terminate don’t plan to for the next two to seven years, so it’s crucial to have an immunization strategy that can protect current funded status gains. As an independent, research-driven team, we’re able to take a long-term view to preserve and grow pensions for financially-secure retirements.”

The full 2021 survey results will be unveiled during an NEPC webinar in January 2022.

For more information on NEPC’s Corporate Defined Benefit Team, click here.

About the Survey

49% of respondents have an asset size greater than $1 billion. 58% of respondents are corporate plans while 27% are healthcare plans. 15% identified as ‘other.’

ABOUT NEPC, LLC

NEPC is an independent investment consultant and private wealth advisor, serving over 400 retainer clients and $1.4 trillion in total assets. Combining a proprietary research team dedicated to the long-term challenges facing investors with our unique client-centric model, NEPC builds forward-looking investment portfolios for institutional investors and ultra-high-net-worth individuals. To learn more about NEPC, visit nepc.com.

BOSTON–(BUSINESS WIRE)–NEPC, a leading research-driven investment consultant with $1.3 trillion in AUA today unveiled The Explorer Program, a platform to identify, meaningfully explore and engage with diverse-owned and -led investment management firms who are not currently 1- or 2-rated by NEPC. Once in the program, the NEPC Research team will consider these diverse managers for inclusion in client portfolios and for future inclusion on the firm’s Focused Placement List (FPL), which is comprised of top-ranking 1-rated managers.

“We are intentional about our engagement with diverse managers,” said Will Forde, Principal and Senior Consultant at NEPC and member of the firm’s Diverse Manager Committee. “Several studies have shown that diverse investment managers often earn better results for their clients than the market more broadly. That’s partly why The Explorer Program is so necessary, it will increase the number of NEPC’s rated diverse strategies by approximately 30%, allowing our clients to choose from a stronger set of options.”

The Explorer Program was unveiled at NEPC’s annual Equitable Manager Participation Workshop, an event that seeks to further expand NEPC’s network of diverse managers through meaningful discussions and engagements.

As part of this program, each researcher on the Marketable Securities team will source at least one Explorer strategy within their asset class area of coverage. Like FPL strategies, Explorer strategies will be fully vetted and approved by NEPC’s Due Diligence Committee and/or Alternative Asset Committee. The vetting of Explorer strategies is consistent with the firm’s standard framework for investment strategy due diligence.

Explorer strategies will have comparable characteristics to FPL firms and strategies but may differ in some ways, including lower assets under management, shorter track records, limited back office resources, higher fees and a unique investment approach. The NEPC Research team will conduct annual reviews of the program to identify those diverse strategies ready to migrate to the firm’s Focused Placement List.

The idea for The Explorer Program was directly inspired by the specific goals set forth in NEPC’s Diverse Manager Policy 2.0, which outlines the firm’s short-term and long-term goals for increasing NEPC’s engagement with diverse managers. Two key goals of this policy were to increase the number of meetings with diverse firms by 10% in 2020 and for diverse managers to represent 10% of managers on the firm’s Focused Placement List by the end of 2021.

NEPC’s first annual Diversity, Equity and Inclusion (DEI) Progress Report, the first comprehensive DEI report of its kind from an investment consultant, illustrates how NEPC is achieving those publicly-stated goals on expanding engagements with diverse-owned and diverse-led investment managers.

“NEPC’s ongoing commitment to identifying and supporting diverse-owned and -led investment managers reflects our view that diversity, equity and inclusion will drive long-term success in our business as well as the investment industry, more broadly,” said Chenae Edwards, Partner at NEPC and co-chair of the firm’s Diversity, Equity and Inclusion Network. “Institutional investors have taken important steps to increase their engagement with diverse managers in the last year. However, there is more progress to be made and The Explorer Program is designed to fuel that progress. As a firm, NEPC will continue pushing for radical transparency and accountability around diversity, equity and inclusion throughout the entire investment industry.”

The new Explorer Program is a product of thoughtful collaboration between NEPC’s Research team and the firm’s Diverse Managers Committee, which consists of senior consultants and senior research professionals specializing in public markets and alternative investment strategies.

To learn more about NEPC’s DEI programs, click here or read this report.

BOSTON–(BUSINESS WIRE)–NEPC, a leading research-driven investment consultant with $1.3 trillion in AUM, today published its 1st Annual Diversity, Equity and Inclusion (DEI) Progress Report in a push for radical transparency and accountability in the investment industry.

The first comprehensive DEI report of its kind from an investment consultant, the 42-page report delivers on a 2019 commitment to measure quantitative and qualitative progress toward publicly-stated DEI goals on expanding engagements with diverse-owned and diverse-led investment managers and increasing diversity and championing a culture of equity and inclusion among NEPC employees, leaders and owners.

“You cannot manage what you don’t measure,” said Sam Austin, Partner, Executive Committee Member and Manager of NEPC’s Western U.S. Public Funds Consulting Team. Austin has spearheaded the firm’s DEI efforts since joining in 2017 and is currently Chair of NEPC’s Diversity and Inclusion Board.

“We hold ourselves accountable to specific goals for diversity, equity and inclusion in the same way we manage our progress toward any other important strategic objective,” Austin said. “Progress does not always occur in a straight line, so quantitative data may differ from year to year. But we will always be transparent in reporting on whether we are making meaningful improvement over time.”

The progress report illustrates specific initiatives underway at NEPC to continue working towards DEI goals in the years to come. Significant metrics in NEPC’s 1st Annual DEI Progress Report include:

• NEPC brought on diverse talent in 2020: When looking at gender, ethnicity and race, more than half (58%) of NEPC’s new hires in 2020 were diverse.
• 2020 saw strong upward mobility among female employees and leaders at NEPC: Gender diversity at the partner and principal level (30% female identifying employees) is nearing the same rate as within the firm’s total employee population (36% female identifying employees).
• More progress needs to be made to increase ethnic and racial diversity among leadership: At the most senior levels, ethnic and racial diversity (10.8%) remains lower than ethnic and racial diversity of the overall NEPC employee population (24%).
• DEI increased at the ownership level: Partners that are diverse by gender, race or ethnicity own a 30% interest in the firm.
• Engagement with diverse-led and diverse-owned investment managers increased significantly: NEPC achieved a 72% increase in the number of Research interactions with diverse-owned¹ and diverse-led² firms and achieved a 45% increase in the representation of these diverse firms on NEPC’s Focused Placement list.

Speaking about the urgency for advancing DEI in finance, Chenae Edwards, Partner and Co-Chair of NEPC’s Diversity, Equity and Inclusion Network, said, “The lack of diversity and equitable practices in the finance industry is the result of decades of persistent actions – or lack thereof – by leaders, board members and companies. The moment requires similarly persistent actions from all stakeholders to reset our industry’s foundation to reflect the rich diversity of the global marketplace.”

NEPC hopes their leadership in voluntarily publishing this DEI Progress Report will challenge other investment consultants, asset managers and investors to transparently set, pursue and report on their goals for diversity, equity and inclusion.

ABOUT NEPC, LLC

NEPC is an independent investment consultant and private wealth advisor, serving 391 retainer clients and $1.3 trillion in total assets. Combining a proprietary research team dedicated to the long-term challenges facing investors with our unique client-centric model, NEPC builds forward-looking investment portfolios for institutional investors and ultra-high-net worth individuals. To learn more about NEPC, visit nepc.com.

_________________
¹PC defines diverse-owned investment managers as a firm that is at least 50% owned by an underrepresented group.
²PC defines diverse-led investment managers as firms that is 33% -to-50%-owned by an underrepresented group.