{"id":1143,"date":"2020-03-24T17:15:00","date_gmt":"2020-03-24T21:15:00","guid":{"rendered":"https:\/\/www.nepc.com\/private-wealth\/newsroom\/nepc-survey-majority-of-defined-benefit-plans-expecta-recession-negative-returns-due-to-covid-19\/"},"modified":"2021-11-02T19:09:27","modified_gmt":"2021-11-02T23:09:27","slug":"nepc-survey-majority-of-defined-benefit-plans-expecta-recession-negative-returns-due-to-covid-19","status":"publish","type":"newsroom","link":"https:\/\/www.nepc.com\/private-wealth\/newsroom\/nepc-survey-majority-of-defined-benefit-plans-expecta-recession-negative-returns-due-to-covid-19\/","title":{"rendered":"NEPC Survey: Majority of Defined Benefit Plans Expect Recession, Negative Returns Due to COVID-19"},"content":{"rendered":"<div class=\"wpb-content-wrapper\">[vc_row][vc_column width=&#8221;1\/1&#8243;][vc_column_text uncode_shortcode_id=&#8221;171039&#8243;]BOSTON&#8211;(BUSINESS WIRE)&#8211;<a href=\"https:\/\/www.nepc.com\/\">NEPC, LLC<\/a> one of the industry&#8217;s largest independent, research-driven investment consulting firms, today announced the results of a survey of defined benefit plan sponsors, conducted to gauge their views on the U.S. economy and investment strategies amid the COVID-19 pandemic.<\/p>\n<p><!--more-->&#8220;The rapid spread of the new coronavirus has rattled markets and shaken corporate pensions who are trying to determine the true economic and market impacts of this pandemic,&#8221; said Brad Smith, Partner and member of NEPC&#8217;s Corporate Practice Group. &#8220;Our survey of defined benefit plan sponsors showcases a deeply negative view of the economy and stock market, with the majority of plans expecting a COVID-19-led recession and negative returns on equities. While this is a new landscape of uncertainty, NEPC is counseling corporate pensions and all investors to mitigate risk by staying diversified, rebalancing towards targets, and having a clear plan of action.&#8221;<\/p>\n<p>Top findings include:<\/p>\n<ul>\n<li><strong>Investors expect a possible U.S. recession due to COVID-19: <\/strong>Seventy-nine percent of respondents say there is a 50 percent or greater chance of a recession, with all respondents indicating there is at least a 25 percent or greater chance.<\/li>\n<li><strong>Negative interest rates in the U.S. are unlikely:<\/strong> Sixty-seven percent of respondents believe negative interest rates are unlikely (only a 25 percent chance of occurring). Fourteen percent of respondents indicated they believe there is no chance.<\/li>\n<li><strong>The majority of investors are staying the course:<\/strong> Fifty-two percent of all respondents stated the market is too volatile for action. Those that are making adjustments are rebalancing to targets (31 percent) and raising cash (seven percent).<\/li>\n<li><strong>Investors expect negative returns from the S&amp;P 500 in 2020: <\/strong>Sixty-three percent of all respondents expect a negative return in 2020 with 15 percent expecting a loss greater than -10 percent for the year. Only 37 percent of respondents expect positive returns.<\/li>\n<\/ul>\n<p>Of those surveyed by <a href=\"\/focus-areas\/corporate\" target=\"_blank\" rel=\"noopener\">NEPC&#8217;s Corporate Defined Benefit Group<\/a>, 53 percent had an asset size of less than $1 billion, with 47 percent of respondents having an asset size greater than $1 billion. The results of the survey indicate that asset size might play a role in a plan&#8217;s economic and market outlook.<\/p>\n<p>Larger plans (above $1 billion in assets) are more likely to have a negative view of the economy, with 34 percent of these respondents indicating that COVID-19 is likely to lead to a recession (greater than 75 percent chance). This is compared to the 24 percent of smaller plans (less than $1 billion in assets) who believe the same. This difference in perception applies to markets, as well. Almost half (47 percent) of larger plans expect positive returns from the S&amp;P 500 as compared to only 28 percent of smaller plans.<\/p>\n<p>To learn more about how NEPC is helping institutional investors navigate COVID-19-driven volatility, click <a href=\"https:\/\/info.nepc.com\/covid-19\">here<\/a>. For more information on NEPC&#8217;s Corporate Defined Benefit Flash Poll, click <a href=\"\/insights\/taking-stock-pension-investor-flash-poll\" target=\"_blank\" rel=\"noopener\">here<\/a>.<\/p>\n<h3><strong>About the Survey<\/strong><\/h3>\n<p>This NEPC poll was conducted online by the Corporate Practice Group the week of March 9th, 2020. The survey respondents represent a diverse array of corporations and not-for-profit healthcare organizations. Sixty-five percent of survey respondents oversee more than $500 million in assets. Copyright is held by NEPC.<\/p>\n<h3><strong>About NEPC, LLC<\/strong><\/h3>\n<p>NEPC is an independent investment consultant and private wealth advisor with more than 30 years&#8217; experience creating research-based, bespoke investment portfolios that align to the goals of its clients and their constituencies. Combining a proprietary research team dedicated to the long-term challenges facing institutional and high-net investors, with our unique client-centric model, NEPC builds the investment portfolios defining the future of finance.<\/p>\n<p>We service over 360 retained clients representing assets over $1 trillion from our offices in Boston, Atlanta, Charlotte, Chicago, Detroit, Las Vegas, Portland and San Francisco with a forward-thinking approach to solving the most complex challenges facing the investment industry.<\/p>\n<p>To learn more about NEPC, please visit <a href=\"https:\/\/cts.businesswire.com\/ct\/CT?id=smartlink&amp;url=https%3A%2F%2Fwww.nepc.com%2F&amp;esheet=52164379&amp;lan=en-US&amp;anchor=https%3A%2F%2Fwww.nepc.com%2F&amp;index=8&amp;md5=75e7284a6fb91dd81cfd41f7e085d2eb\">https:\/\/www.nepc.com\/<\/a>[\/vc_column_text][\/vc_column][\/vc_row]\n<\/div>","protected":false},"excerpt":{"rendered":"<p>[vc_row][vc_column width=&#8221;1\/1&#8243;][vc_column_text uncode_shortcode_id=&#8221;171039&#8243;]BOSTON&#8211;(BUSINESS WIRE)&#8211;NEPC, LLC one of the industry&#8217;s largest independent, research-driven investment consulting firms, today announced the results of [&hellip;]<\/p>\n","protected":false},"author":95,"featured_media":1115,"template":"","meta":{"content-type":"","footnotes":""},"newsroom_categories":[87],"newsroom_tags":[82,88],"class_list":["post-1143","newsroom","type-newsroom","status-publish","has-post-thumbnail","hentry","newsroom_categories-press-releases","newsroom_tags-press","newsroom_tags-press-release"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - 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