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Money Management Report: Taft-Hartleys turn to OCIOs & Alts

May 4, 2018

More aggressive asset allocations and investment outsourcing to help improve funding

Taft-Hartley pension plan trustees are increasingly considering investment outsourcing and more aggressive asset allocations in an attempt to rehabilitate their plans' poor financial well being. 

91% rejected closing the pension plan to new hires in a recent poll off multiemployer plans

Our recent study of multiemployer pension plans shows that the funded status of nearly half of the funds surveyed were seriously endangered. 

But despite that, most poll respondents rejected the idea of closing their plans to new hires and reducing benefits. 

"[According to our poll] Taft Hartleys are not going away any time soon, so the question is what actions are being taken to improve their funded ratios," Frank Wilkinson, managing director  with SEI's Institutional Group explains. 

"Taft-Hartleys are not going away any time soon"

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On the contrary, most poll respondents indicated that their plans are either planning to increase contributions and allocations to alternative investments over the next 12 months. 

But as investment complexity increases more trustees are willing to hire an outsourced CIO (OCIO) to handle the investment piece. In fact, 83% of poll respondents said they already outsource some level of their investment decision-making or plan to discuss that possibility in their next review.

As the largest OCIO provider to Taft-Hartley plans*, we've seen a 45% increase in multiemployer assets since the end of 2012. 

READ:

Taft-Hartleys turn to OCIOs & Alts

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Legal Note

Distinction based on competitive research utilizing publicly available information as of 12/31/2016. Largest based on number of Taft-Hartley clients, and/or Taft-Hartley client AUM in SEI's OCIO program for which SEI has discretion for money manager hiring and replacement decisions on behalf of those clients.

Information provided by SEI Investments Management Corporation (SIMC), a registered investment adviser and wholly owned subsidiary of SEI Investments Company.