Pension Funds and why they are actively managed

[Running_Man]

As the basis of the idea of this thread was that actually as opposed to what I had previously thought, that pensions needing to pay retirees would by definition need to sell stocks, and act as negative on future stock valuations, the lower interest rates are actually causes pensions to be underfunded so they need more contributions, which has a feedback loop to the stock market.

And then I see today this issue from Barrons:
https://www.barrons.com/articles/fedex-underfunded-pension-plans-borrowing-bonds-interest-rates-federal-reserve-pbgc-fee-51564428891?mod=bol-social-tw

 

[Running_Man]

Intellectual types?

Look through the leaders of most major pension funds and you will find individuals with advanced degrees from American Universities in finance. The same is true at University endowment funds.

 

[Mulligan]

Pensions should have benchmarks to measure against and one would hope the benchmark is appropriate. This one represents my pensions benchmark.
The Policy Benchmark is comprised of 39.0% Russell 3000 Index, 16.5% MSCI ACWI ex-USA Index, 16.0% Bloomberg Barclays U.S. Treasury, 15.0% Bloomberg Barclays U.S. Intermediate Credit Index, 7.5% NCREIF Open End Diversified Core Equity Index, 4.0% Bloomberg Barclays U.S. TIPS 1-10 Year Index, and 2.0% ICE BofAML U.S. High Yield Master II Index.
FWIW, it has beat that benchmark on 3,5,7, and 10 yr annual returns.
Pensions just cannot load up on stocks, liquidity and near term needs of the system through cash disbursements and continuous money flowing in and out of system are examples of reasons why.