Corporate pension funds were the highest-performing category of all defined benefit plans in the first quarter of 2025, according to data from Confluence. The median return of 4,000 defined benefit plans tracked by Confluence in Q1 was 0.52%.
Corporate plans returned 1.78% during the quarter, a result of these plans’ higher fixed-income allocations, largely insulating them from market volatility. Fixed income returned 2.67% in Q1, while equities saw a 4.69% loss.
Still, these plans remain the worst-performing category over the most recent one-, three- and five-year periods, as their fixed-income focus helps them achieve stable returns to meet their liabilities, rather than to maximize investment performance. In the first quarter of the year, corporate plans increased their fixed-income allocations by 4%, while decreasing their equity allocations by nearly 3%, according to Confluence.
High-net-worth plans—the plans or portfolios of wealthy individuals—saw a 0.73% loss, a result of these plans’ higher allocation to equities, averaging more than 60%, and lower allocations to fixed income, averaging less than 20%. Returns for public pension funds and Taft-Hartley plans were flat during the quarter, while endowments and foundations saw a small return. Confluence considers high-net-worth plans, endowments and foundations in the company’s DB plan universe.
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According to Confluence, corporate pension plans had a median allocation of just more than 60% to fixed income and just more than 30% to equities. Public pension funds, by comparison, allocated about 55% of their assets to equities and less than 30% to fixed income.
For the 12-month period ending March 31, the median return of all defined benefit plans was 5.21%, down more than 6.5% when compared with the previous year, according to Confluence.
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Tags: Confluence, Pensions
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