SEI Research: Multiemployer Plans Considering Changes in Wake of Poor Funded Status

OAKS, Pa., June 22 /PRNewswire-FirstCall/ -- New research from SEI's (Nasdaq: SEIC) Pension Management Research Panel outlines four key issues impacting multiemployer plans and addressing poorly funded plans.  The paper shows that nearly half (49 percent) of the multiemployer plans questioned said their plan was below 80 percent funded. The Worker, Retiree, and Employer Recovery Act (WRERA) provided multiemployer trustees with a permissible election to treat the plan's current status as the plan's status in the preceding plan year. Nearly three in four trustees have chosen to do so.

"Clearly, the recent economic environment has placed tremendous stress on multiemployer pension funds and their trustees," said Jon Waite, Director, Investment Management Advice and Chief Actuary of SEI's Institutional Group. "The difficulties in overseeing these plans have continued to mount and multiemployer plan trustees are trying to implement new strategies for managing these plans moving forward."

In response to this challenging environment, multiemployer trustees appear more open to change. Historically, trustees had been relatively conservative when it came to investing in alternatives. Yet, 87 percent said the multiemployer plans they oversee currently have an allocation to alternatives. Furthermore, over a third (39 percent) said that the organization had increased their plan's allocation to alternatives during the past 12 months.

An additional sign of investment management change is that 67 percent said there was an increased focus on the plan's liabilities when setting investment strategies. Other potential changes could result from the fact that almost three-quarters (73 percent) of those trustees using a consultant said it has been more than five years since they last changed their consultant. Twenty-three percent said they would like a model that reduces the time spent evaluating and selecting manager finalists from the consultants.

The Panel conducted primary research by questioning a select group representing 31 unique multiemployer pension funds. Of those individuals questioned, 39 percent were union trustees, 19 percent were management trustees, and 42 percent filled other pension administrative roles.

A complete summary of the poll is available by emailing [email protected].

About SEI's Institutional Group

SEI's Institutional Group delivers integrated healthcare, retirement and nonprofit investment solutions to more than 500 global institutional clients (of which 340 are U.S. based) in six different countries. SEI enables clients to meet financial objectives, reduce business risk, and fulfill their due diligence requirements through implemented fiduciary management strategies for defined benefit plans, defined contribution plans, endowments, foundations and other balance sheet assets. For more information, visit www.seic.com/institutions

About SEI

SEI (Nasdaq: SEIC) is a leading global provider of outsourced asset management, investment processing and investment operations solutions. The company's innovative solutions help corporations, financial institutions, financial advisors, and affluent families create and manage wealth. As of March 31, 2010, through its subsidiaries and partnerships in which the company has a significant interest, SEI administers $394 billion in mutual fund and pooled assets and manages $162 billion in assets. SEI serves clients, conducts or is registered to conduct business and/or operations, from numerous offices worldwide. For more information, visit www.seic.com.

SOURCE SEI