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Corporate pension funds are feeling the heat after the fits and starts of the Trump administration’s tariff policies sparked radical market swings, including some of the biggest one-day moves of the past decade.
Plans for S&P 500 companies lost nearly $74 billion in value in the days after President Trump’s “Liberation Day” tariffs were announced and funded status dipped below 100% in March for the first time since last September, staying there until early this month, according to professional services firm Aon. Stocks have since recovered with the surprise agreement between the U.S. and China to unwind certain tariffs, but uncertainties remain about when and where markets will settle.
“They’re all trying to figure out what the impact to them is,” said Matt McDaniel, a partner in consulting firm Mercer’s wealth practice, of the dozens of corporate pension managers he’s heard from since stocks started gyrating last month. For those pensions that have a less volatile investment strategy, plan managers have been surprised to learn their pensions are mostly unscathed, he said. “Whereas others with different investment strategies are having a more painful experience.”
The “others” are pension plans that have kept assets in volatile investments versus fixed-income investments. For this group, it’s been a taxing several weeks assessing the duration and effect of the volatility on their pensions, with some considering changing or pausing strategies to reduce risk, pension advisers say.
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