The Denver Foundation: Aligning Assets with Mission
It might seem a modest shift. But for TDF, it was the start of an ambitious strategy to use both its investments and its grantmaking to advance the goals at the heart of its philanthropic mission: diversity, equity, and inclusion.
NEPC Survey: Endowments Soar But Universities Fear Enrollment Declines
BOSTON--(BUSINESS WIRE)-- NEPC, LLC, one of the largest independent, research-driven investment consulting firms, today announced the results of its 2021 Higher Education Survey, which highlights both present concerns and longer-term outlooks for some of the nation’s largest higher ed endowments.
COVID-related concerns are receding, with only 8% indicating concerns about pandemic-related expenses. There is an overall tenor of optimism among higher ed endowments. Only 19% signaled significant concern about inflation and 50% have plans for significant capital expenditures.
Enrollment declines (cited by 62%) are now the top worry for universities in spite of healthy enrollment levels for most universities. 63% reported either no change or an increase in enrollment compared to pre-pandemic levels. Just 10% of respondents reported an enrollment decline of more than 10%. Vaccines continue to be hotly debated, with 53% of respondents requiring students to be vaccinated before returning to campus.
“This time last year, endowments were reeling from the most severe liquidity crisis higher education had faced since the global financial crisis,” said Sam Pollack, Partner and senior member of NEPC’s Endowments and Foundations team. “Today, the numbers tell a very different story. Large university endowments achieved tremendous returns at fiscal year end, in large part due to their strong private market allocations. The challenge for investment teams in 2022 will be maintaining discipline with their spending rates, while making strategic investments in areas that were put on hold at the peak of the liquidity crisis.”
Endowments are also focused on sustainable investing and diversity. 37% cited ESG and impact investing as a priority, and 28% plan to increase engagement with diverse-led and diverse-owned managers. Institutions are more cautious about making Net Zero commitments: 72% do not have Net Zero strategies in place or plans to create one. Tracking diversity efforts also remains a work in progress: 64% do not currently track engagement with diverse managers.
For the full results of NEPC’s 2021 Higher Education Survey, please submit this form.
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.
Media Contact:
Laura Nascimento
PlanSponsor: Rebounding Markets Give DB Plan Funded Status a Boost in October
Chief Investment Officer: Broken China? Maybe Things Aren’t So Bad
Pensions and Investments: Improved Corporate Pension Funding Enables Further Derisking - NEPC
NEPC Hires Former Aon Executive to Lead Innovation of Defined Contribution Solutions
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.
Pensions and Investments: NEPC Appoints Defined Contribution Solutions Head
Pensions and Investments: Private Equity, Venture Capital Turbocharge Endowment Returns
NEPC Survey: Past Decade Saw Pensions Increase LDI Allocations, Funded Status Improve Dramatically
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 10th 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.
