Pension Indicator Updated for October 31, 2018

Is it safe to look at my asset statement?

By: Matthew Klein, Principal, Findley

Safe to say that volatility returned in October.  In a month where it seemed more common for the equity markets to go up or down by more than 1% daily, the S&P 500 lost 6.8%.  While the S&P is still up 3% for the year, the amount given back in the markets will cause some heartburn.  The interesting piece of the puzzle (to me, anyway) was that the Bloomberg Barclays Long Government Credit index also was down 3.4% for October and is down 8.6% for the year.  Normally, when we see the equity markets make a pullback of this level, the “flight to quality” usually increases prices for bonds.  However, the decreasing prices for bonds means yields increased over the month.  From a pension funding perspective, the increased yields on bonds muffles the impact of the decrease in equities.

If you take a look at the Pension Indicator’s graphs then, while the numbers all went down from last month, hopefully you are pleasantly surprised by how little they went down.  Once you figure in the rise in interest rates in 2018, every number we show is still in positive territory for the year.  And to most of the plan sponsors that I converse with, not falling further behind is all they ask.

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.

Year to Date Investment Mix 
Plan TypeAggressiveBalancedLDI LiteLDI
 Frozen (for several years) 3.9% 3.0% 0.6% -2.0%
 Recently Frozen 7.1% 6.1% 3.7% 1.0%
 Ongoing Traditional 10.7% 9.7% 7.2% 4.4%
 Cash Balance 4.7% 3.8% 1.4% -1.2%
Month-over-Month Investment Mix 
Plan TypeAggressiveBalancedLDI LiteLDI
 Frozen (for several years) -3.0% -2.6% -2.5% -1.9%
 Recently Frozen -1.9% -1.5% -1.4% -0.8%
 Ongoing Traditional -0.6% -0.2% -0.1% 0.5%
 Cash Balance -2.8% -2.4% -2.3% -1.7%
12-Month Change Investment Mix 
Plan TypeAggressiveBalancedLDI LiteLDI
 Frozen (for several years) 8.1% 7.1% 4.9% 2.3%
 Recently Frozen 10.4% 9.3% 7.1% 4.4%
 Ongoing Traditional
12.9% 11.8% 9.5% 6.7%
 Cash Balance 8.8% 7.8% 5.5% 2.9%