The Impact of Market Volatility on Retirement Investing

Defined contribution and corporate pension portfolios have suffered YTD declines of 10% to 20% and 8% to 10% respectively, while system-wide funded status dropped from 87% to roughly 75% before partially recovering to 80%. In response to this volatility, financial advisors recommend strategic rebalancing and a review of governance structures, noting that younger investors should remain invested while those near retirement reassess risk tolerance amid a shift toward individual responsibility. Concurrently, a Congressional stimulus bill provided temporary relief through waived 2020 required minimum distributions and deferred pension contribution obligations, though sponsors anticipate continuing their advocacy for permanent funding solutions in 2021.