Investment consultant Mercer believes that many plan sponsors are planning ahead and seeking ways to prevent dramatic declines in funded status observed in 2002 and 2008.
Based on the most recent fiscal year-end financial statements, approximately 39% of the S&P 1500 companies' pension plan assets were invested in bonds. The expected allocation to bonds at yearend 2009 would have been 36%, according to Mercer.
In dollar terms there was a $40 billion shift to bonds from other asset classes.
In addition to switching assets to bonds from equities, Mercer is seeing plan sponsors use financial instruments (such as