Corporate Pensions Break Out of Herd Mentality: Report


The largest U.S. corporate pensions have diversified their investment strategies and broken out a herd mentality, according to new research.

Bob Collie of Russell Investments studied the regulatory filings of the twenty largest U.S. corporate pensions. He found:

For me, the most striking feature is the divergence between the investment approaches. Once upon a time, pension plans paid a lot of attention to peer group comparisons.

Among the twenty corporations in the $20 billion club, we today see significant differences in just about every aspect of investment strategy:

– Return-seeking vs. liability hedging: Ford’s U.S. plans have 77% of their assets invested in fixed income, and just 7% in listed equity. Johnson & Johnson has 79% of their worldwide pension assets invested in equity, just 21% in fixed income.

– Global or domestic bias: over half of UPS’s U.S. plan equity assets are international. Honeywell’s U.S. plan equity assets are 76% domestic.

– Real estate: Dow, Northrop Grumman and Verizon each have around 10% of worldwide pension assets invested in real estate. Exxon Mobil has none.

– Private equity: Verizon has a 19% allocation to private equity; Federal Express less than 1%.

– Hedge funds: Over 12% of UPS’s pension assets are invested in hedge funds. Five club members have no allocation.

Read the full blog post here.


Photo by Sarath Kuchi via Flickr CC License

Share This Post

Recent Articles

Leave a Reply

Privacy Policy | © 2019 Pension360 and © 2014 Policy Data Institute | Site Admin · Entries RSS ·