Pension Indicator Updated for November 30, 2021

A Time to Pause and Give Thanks

By: Brian Hrabak, CFA, Clearstead

Based on solid corporate earnings and macro-economic data, the S&P 500 was steadily marching higher throughout November until the news of a new COVID-19 variant led to a late month sell-off. Persistent inflation concerns and possible acceleration of the unwinding of Federal Reserve support contributed to the late month volatility and equity market decline.

The Treasury yield curve flattened in November as investors digested the possibility of earlier than anticipated rate hikes and the impact the new variant may have on economic growth. The 10-year Treasury yield declined 9 bps during the month to close at 1.47%1. Investment grade corporate spreads widened by 12 basis pointsbased on heavy supply coming into year-end and a risk-off attitude towards the end of November.

Equity market returns were negative across the globe in November with the S&P 500 -0.7%, the MSCI EAFE -4.7% and MSCI Emerging -4.1%1. Within fixed income, the modest decline in interest rates led to the Bloomberg Aggregate Bond Index returning +0.3%. The Bloomberg Long Govt/Credit Index returned +1.3% for November and -1.7% YTD1.

Negative return on growth assets and slightly lower discount rates pushed funded statuses lower during November. The lower interest rate environment resulted in a liability increase of 0.4% - 0.7% in conjunction with asset returns of between +0.2% - 1.6%. 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 23.2% YTD through November1. It has been a year to be thankful in terms of pension funding improvement.

Wishing everyone a safe, healthy, and prosperous holiday season!

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.

1Bloomberg

Year to Date Investment Mix 
Plan TypeGrowthBalancedLDI LiteLDI
Frozen (for several years) 11.6% 9.4% 6.4% 2.9%
 Recently Frozen 11.8% 9.6% 6.6% 3.1%
 Ongoing Traditional 12.1% 9.8% 6.9% 3.3%
 Cash Balance 12.0% 9.7% 6.7% 3.2%
Month-over-Month Investment Mix 
Plan TypeGrowthBalancedLDI LiteLDI
 Frozen (for several years) -2.0% -1.4% -0.9% -0.2%
 Recently Frozen -2.1% -1.6% -1.0% -0.4%
 Ongoing Traditional -2.3% -1.7% -1.2% -0.5%
 Cash Balance -2.0% -1.4% -0.9% -0.2%
12-Month Change Investment Mix 
Plan TypeGrowthBalancedLDI LiteLDI
 Frozen (for several years) 15.2% 12.2% 8.4% 3.7%
 Recently Frozen 15.5% 12.5% 8.7% 4.0%
 Ongoing Traditional
15.9% 12.9% 9.0% 4.4%
 Cash Balance 15.6% 12.5% 8.7% 4.1%


Frozen Plan 7 31

Recently Frozen Plan 7 31

Ongoing Plan 7 31

Cash Balance 7 31

Disclosure