Only 9 Percent of Large Pension Plans Didn't Rebalance Last Year
Pensions & Investments (07/02) Vol. 30, No. 15 p.3; Kovaleski, Dave

Rebalancing was commonplace among large pension plans last year, according to Greenwich Associates. A new survey by the consulting firm reveals that 91 percent of pension plans with more than $1.5 billion in assets rebalanced. The strategy for long-term investors is to stay with the program, says Greenwich managing director Rodger Smith. "The program was getting out of kilter; therefore they had to take some action to get themselves back into balance," explains Smith. As a result of the decline in the market, Smith expects to see another round of rebalancing over the summer. About 54 percent of the pension plans rebalanced because they were moved away from their target allocations by the markets, and about 50 percent did so because their investment policies or objectives changed, with one-third citing the impact of asset-liability studies; only 5 percent rebalanced to lower their risk profile, and only 5 percent rebalanced to increase their risk profile. The rebalancing policies are likely to result in some shifting of money back into equities. Of the pension funds that did not rebalance, one-third said they do not have a rebalancing policy, while others targeted wide ranges or had stable portfolios.


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