NEPC’s Defined Benefit team recently published the results 2023 Defined Benefit (DB) Trends Survey which received 51 corporate and healthcare respondents with the majority of plans ranging in size from $100 million to over $3 billion.

Key Takeaways

  • There seems to be a shift to allocating more assets to LDI from prior years. On average, respondents had 41% of assets allocated to LDI compared to survey results in 2021 where only 30% of assets were allocated to LDI.
  • Forward-looking Expected Return on Assets (EROA) reversed course and are trending higher than in previous surveys. 71% of plans indicated they had an EROA of 6% or higher in 2023, a significant jump from NEPC’s most recent data in 2021, where only 52% of plans had an EROA of 6% or higher.
  • Respondents still fear a slowdown in global growth is imminent as 42% of respondents selected this as their greatest threat to their investment programs this year.
  • 40% of respondents expect Pension Discount Rates to remain the same level over the next year. However, 32% of respondents expect Pension Discount Rates to fall during that same time period, which is surprising given the Fed has stiffened its stance around staying committed to a more hawkish monetary policy going forward.

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