Retirees Concerned About Pension Investments



In the first quarter of 2020, stock markets reacted chaotically to the arrival of COVID-19 reaching our shores.

The aggressive virus had originally been on the attack in Asia and Europe, but when it eventually entered the U.S, bringing with it, a violent health and economic scare, leaders on the federal and in some states needed to act swiftly.


It seems like forever, but ever since our leaders in Washington, D.C. have spoken frequently to reassure and advise the American people.


The Federal Reserve was forced to lower rates and take other necessary action. The U.S. Treasury, Congress, and the White House all did what was needed to keep the economy and businesses in our local communities from screeching to a halt.


It was a big dose of bad medicine. According to Bloomberg News analysis, the largest U.S pension system, the California Public Employee’s Retirement System, lost $67 billion in market value, between January and April.


A survey, conducted by the telephone retiree focused, Association of BellTel Retirees, from late March to early April, asked retirees about their comfort level with the fiscal conditions and how it might impact their retirement security.


According to the survey, the turbulence and uncertainty in the financial markets was then frightening for retirees, given they have so much of their retirement future to lose.


• By a 4-to-1 ratio, 21.27% were concerned about the holdings within their employer-managed defined benefit plan -vs just 5.34 % with the same plan who said they were not worried.


• Again, by a more than 4-to-1 ratio, 20.81% of all respondents who have de-risked lump sum pensions said that they were concerned with the market gyrations and drops.


• Among the third group – lump sum pension asset holders - the fear factor was far lower, but still significantly concerning, as 18.58% said they were worried -vs- 6.92% who said they were not.


Next, more than 44% of the respondents advised that they are uncertain regarding the future of the financial markets over the coming six-month period. Of the 23% identifying as taking a lump sum pension payout, they said they were concerned about the market, while some 5% identified themselves as undeterred investors who anticipated picking up some investment bargains when the market hit bottom.


Another 5% who say they have a defined benefit plan felt they could purchase more investments as the financial markets go south, while 2.7% of defined benefit owners said liquidating now would be the way to make them less nervous. A combined over 19% advised that they were “indifferent to the market gyrations.”

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