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Trends in Corporate Pension Allocations

Corporate defined benefit pension plans continue the trend of asset de-risking while also increasing the use of other investments (real estate, private equity, hedge funds, and commodities) to generate return.

Figure 1: Asset Allocation for Corporate Defined Benefit Plans*

Other strategies include utilizing Treasury futures to retain equity allocation (and return), while introducing some leverage to portfolios. Given the underfunded status of many plans, there is still interest in maintaining a certain level of risk in the asset portfolio.

*Source: Milliman 2020 Corporate Pension Funding Study, April 28, 2020.