Plan Sponsors Expect Recession, Negative S&P Returns in 2020

"While this is a new landscape of uncertainty, NEPC is counseling corporate pensions and all investors to mitigate risk by staying diversified, rebalancing towards targets, and having a clear plan of action."

And indeed a majority of investors said they were staying the course. Fifty-two percent of survey participants said the market was too volatile for action. Of those making adjustments, 31% said they were rebalancing to targets, and 7% were raising cash.

Respondents to the survey conducted by NEPC's corporate defined benefit group represented a diverse array of corporations and not-for-profit health care organizations. Fifty-three percent had an asset size of less than $1 billion, and 47% had an asset size greater than $1 billion.

NEPC noted that larger plans were likelier to have a negative view of the economy. One-third of these respondents said the chance of a recession owing to COVID-19 was greater than 75%, compared with 24% of smaller plans that held the same view.

This difference in perception applied to markets, as well. Forty-seven percent of bigger plans expected positive returns from the S&P 500, compared with only 28% of smaller plans.