Pension Indicator Updated for September 30, 2021

September Swoon

By: Brian Hrabak, CFA, Clearstead

Volatility returned to the markets in September. Investors digested weaker economic data, negative headlines out of China’s property sector, politics surrounding the ongoing debt ceiling, and a hawkish tone out of the Federal Reserve’s last meeting. The Conference Board revised down their third quarter US GDP estimate to 5.5% from their 6.6% during the second quarter1. The US jobs report also disappointed, reflecting 235,000 jobs added in August, well short of the 733,000 projected2.

Treasury yields closed higher as the markets reacted to the Fed’s more hawkish comments. The Federal Reserve’s meeting minutes indicated a willingness to respond to growing inflationary pressures by lifting borrowing costs as early as next year and tapering bond purchases as soon as next month. The 10-year Treasury yield rose 18 bps during the month to close at 1.49%3. Investment grade corporate spreads were little changed for the month but did tighten just slightly.

Equity market returns were negative across the board in September with the S&P 500 -4.7%, the MSCI EAFE -2.9% and MSCI Emerging -4.0%3. Within fixed income, rising interest rates led to the Bloomberg Aggregate Bond Index declining -0.9%. The Bloomberg Long Govt/Credit Index returned -2.3% for September and -4.6% YTD3. The higher interest rate environment resulted in a liability decrease of 1.2%-2.2% for September which helped to partially offset asset losses of between 2.2%-2.7%. Except for fully hedged pension plans, strong year-to-date equity markets, coupled with higher interest rates, have helped boost funded ratios as the S&P 500 Index has returned 15.9% YTD through September3.

From all of us at Findley, a Division of USI, and Clearstead, we hope everyone and their families are safe and healthy. 

As always, thanks for reading, and drop us a comment on how we're doing.

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Information provided in this article is general in nature, is provided for informational purposes only, and should not be construed as investment advice. Performance data represents past performance.  Past performance is not indicative of future results.

2US Bureau of Labor Statistics


Year to Date Investment Mix 
Plan TypeGrowthBalancedLDI LiteLDI
Frozen (for several years) 10.9% 8.4% 5.2% 1.6%
 Recently Frozen 12.2% 9.7% 6.5% 2.8%
 Ongoing Traditional 13.6% 11.1% 7.8% 4.0%
 Cash Balance 11.3% 8.8% 5.7% 2.0%
Month-over-Month Investment Mix 
Plan TypeGrowthBalancedLDI LiteLDI
 Frozen (for several years) -1.5% -1.3% -1.3% -1.0%
 Recently Frozen -1.0% -0.9% -0.8% -0.6%
 Ongoing Traditional -0.6% -0.4% -0.3% -0.1%
 Cash Balance -1.4% -1.2% -1.1% -0.9%
12-Month Change Investment Mix 
Plan TypeGrowthBalancedLDI LiteLDI
 Frozen (for several years) 19.9% 15.4% 10.7% 5.0%
 Recently Frozen 20.3% 15.8% 11.2% 5.4%
 Ongoing Traditional
20.9% 16.3% 11.7% 5.9%
 Cash Balance 20.3% 15.8% 11.2% 5.4%

Frozen Plan 7 31

Recently Frozen Plan 7 31

Ongoing Plan 7 31

Cash Balance 7 31