GS Retirement & Investment Solutions
Corporate Pension Quarterly | 4Q 2022
VERSATILITY
AMID VOLATILITY
This financial promotion is provided by Goldman Sachs Bank Europe SE.
THESE MATERIALS ARE PROVIDED SOLELY ON THE BASIS THAT THEY WILL NOT CONSTITUTE INVESTMENT ADVICE AND WILL NOT FORM A PRIMARY BASIS FOR ANY PERSON'S OR
PLAN'S INVESTMENT DECISIONS, AND GOLDMAN SACHS IS NOT A FIDUCIARY WITH RESPECT TO ANY PERSON OR PLAN BY REASON OF PROVIDING THE MATERIAL OR CONTENT
HEREIN. PLAN FIDUCIARIES SHOULD CONSIDER THEIR OWN CIRCUMSTANCES IN ASSESSING ANY POTENTIAL INVESTMENT COURSE OF ACTION.
WHAT'S INSIDE
1
Quarterly Snapshot
2
In the News
3
Portfolio Manager Perspectives
4
Strategy in Focus
5
Market Monitor
6
About Us
7
Library
CORPORATE PENSION QUARTERLY 4Q 2022: VERSATILITY AMID VOLATILITY
Goldman Sachs Asset Management
|
2
1. QUARTERLY SNAPSHOT
Historical Aggregate S&P 500 Funded Status1
Estimated Funded Status (%)
105
Dec 2021
97.5%
100
95
Dec 2019
87.2%
90
Dec 2022
100.2%
•
Dec 2020
89.4%
•
85
80
•
75
70
2019
2020
2021
2022
•
Source: Goldman Sachs Asset Management. As of December 31, 2022. Funded
statuses reflect monthly estimates with the exception of year-end data.
Distribution of Funded Status1
The past year featured geopolitical uncertainty, peak inflation,
aggressive interest rate hikes, and severe drawdowns across
markets. Meanwhile, US corporate pension plans ended the
year in their strongest position since the 2008 Global Financial
Crisis.
In 4Q, the Moody’s Aa corporate bond yield, a rate often
referenced as a proxy for pension discount rates, fell by 15 bps,
thereby increasing the value of aggregate pension liabilities by
an estimated 1.5%.
Meanwhile, market performance improved in 4Q, bolstered by
a recovery in equities. We estimate that, in aggregate, pension
asset returns were 6.0%.
Quarter-over-quarter, asset returns were greater than liability
changes, resulting in our estimate of the funded status for the
aggregate S&P 500 plan rising from 96% on September 30th
to 100% on December 31st.
Market Performance
Aggregate GAAP Funded Status of S&P 500 US Defined Benefit Plans (%)
Asset Class
4Q
Change
2022
Change
2021
Change
Asset Returns2
6.0%
-20.6%
9.3%
US Equity
7.5%
-18.1%
28.7%
75th (113%)
International Equity3
15.8%
-15.0%
9.8%
50th (102%)
Fixed Income4
3.2%
-24.7%
-2.0%
Moody’s Aa Corp. Rate
-15 bps
+226 bps
+36 bps
Est. Change in Plan Liabilities
Due to Discount Rate
1.5%
-24.6%
5.0%
99th (144%)
98
96
100
25th (93%)
1st (75%)
December
2021
September
2022 (E)
December
2022 (E)
1Y Forward Distribution
of Funded Status (E)*
Source: Goldman Sachs Asset Management and Bloomberg. As of December 31, 2022.
Percentage changes represent total returns.
Source: Goldman Sachs Asset Management. As of December 31, 2022.
E = Estimated by Goldman Sachs Asset Management.
*1 year GS Asset Management projected funded status range using estimates of
asset/liability returns and volatility.
Source: Goldman Sachs Asset Management. As of December 31, 2022. The economic and market forecasts presented herein have been generated by Goldman Sachs Asset
Management for informational purposes as of the date of this presentation. They are based on proprietary models and there can be no assurance that the forecasts will be
achieved. Please see additional disclosures at the end of this presentation. Past performance does not guarantee future results, which may vary.
1. GAAP funded status estimates are based on US plans (where specified) of defined pension plans within the S&P 500 (i.e. 299 companies with pension data per GS Asset
Management research). 2. Average asset-weighted return of S&P 500 companies’ US defined benefit plans. 3. Mix of MSCI EAFE and MSCI ACWI ex-US. 4. Mix of Corporates
(Bloomberg Agg), High Yield (iShares), Treasuries, and Long Credit (iShares).
CORPORATE PENSION QUARTERLY 4Q 2022: VERSATILITY AMID VOLATILITY
Goldman Sachs Asset Management
|
3
2. IN THE NEWS
Regulatory Updates and Changes
Pension Benefit Guaranty Corporation (PBGC) Releases 2023
Premiums
•
•
•
In October, the PBGC released its 2023 premium rates,
which reflect some of the largest year-over-year increases
seen in recent years. After 2019, all rates have been subject
to indexing based on the Social Security Administration’s
National Average Wage index, which per its most recent print,
increased by 8.89% in 2021.
However, a provision in the SECURE 2.0 Act will now cap
variable-rate premiums at the 2023 level of 5.2% of unfunded
vested benefits. This is welcome news for underfunded plans
that would have otherwise faced indefinitely increasing rates
due to the indexing of variable-rate premiums to inflation.
Updates to PBGC premium rates for 2023 are as follows:
•
•
•
•
The provisions in SECURE 2.0 do not impact flat-rate premiums.
PBGC flat-rate premiums, a fee assessed on every plan
participant regardless of status (i.e., retired, deferred vested
or active) rose from $88 to $96 per participant.
PBGC variable-rate premiums, a fee assessed on unfunded
vested benefits (UVB), increased year-over-year from $48 to
$52 for every $1,000 of UVB (i.e., from 4.8% to 5.2%)
The maximum variable-rate premium (i.e., cap) that can be
assessed for each participant was raised from $598 to $652.
For multiemployer plans, the flat-rate premium per participant
increased from $32 to $35 year-over-year.
Source: Goldman Sachs Asset Management and Pension Benefit Guaranty Corporation (PBGC). As of 4Q 2022.
3Q Annuitization Volumes Higher in 2022
Transactions Announced During 3Q
The Life Insurance Marketing and Research Association (LIMRA)
noted that buy-out figures for 3Q 2022 surpassed $26 billion.
Compared to 3Q 2021, annuitization volume during the same
period in 2022 was 66% higher.
•
•
Quarterly Buy-out Sales ($MM)
26,145
15,787
13,750
12,386
11,338
7,732
4,7574,166
1Q
2Q 3Q
2019
4,968
4,599
4,462
2,270
4Q
1Q
2Q 3Q
2020
•
2,667
1,016
4Q
1Q
2Q 3Q
2021
12,311
4Q
1Q
2Q 3Q
2022
In mid-October, Sysco entered into an agreement to transfer
approximately $700mn in defined benefit pension obligations
to MassMutual. The transaction is set to impact ~10,000 Sysco
participants and beneficiaries effective January 1st, 2023.
Peabody Investments, a wholly owned subsidiary of Peabody
Energy, announced expectations to complete the termination
of its US plan in the first half of 2023 via voluntary lump sum
payouts, followed by a transfer of the remaining liabilities to
an insurer.
In its latest 10-Q filing, West Pharmaceutical Services
disclosed that it offered lump sum payments to certain US
plan participants, following which it made a $6.5mn cash
contribution to the ~$200mn plan (US assets as of FY21) prior
to its purchase of a group annuity contract.
Source: Company reports. The transactions shown above are not intended to be an
exhaustive list. They are based on press releases and company reports observed
during the quarter and are selected based on salience in the press.
Source: LIMRA Group Annuity Risk Transfer Survey. As of 3Q 2022.
Source: Goldman Sachs Asset Management. As of December 31, 2022. Any reference to a specific company or security does not constitute a recommendation to buy, sell, hold or
directly invest in the company or its securities. Company names and logos, excluding those of Goldman Sachs and any of its affiliates, are trademarks or registered trademarks of
their respective holders. Use by Goldman Sachs does not imply or suggest a sponsorship, endorsement or affiliation.
CORPORATE PENSION QUARTERLY 4Q 2022: VERSATILITY AMID VOLATILITY
Goldman Sachs Asset Management
|
4
3. PORTFOLIO MANAGER
PERSPECTIVES
With persistent market volatility through to the beginning of 2023, institutional investors are
increasingly evaluating the role of Exchange-Traded Funds (ETFs) as an efficient implementation
vehicle. Brendan McCarthy and Alex von Obelitz from the GS Asset Management ETF team share
their views on why and how institutional investors are incorporating ETFs in their portfolios.
Brendan McCarthy
Alex von Obelitz
Head of ETF Specialists & Capital Markets
Head of ETF Business Strategy
Client Solutions & Capital Markets
Client Solutions & Capital Markets
Goldman Sachs Asset Management
Goldman Sachs Asset Management
What have been some of the drivers of increased
institutional investor interest in ETFs?
It’s interesting to note that each crisis since 2008 seems to
have resulted in an increase in ETF usage, and 2020 & 2022
were no different. When uncertainty is high, liquidity and
transparency—two well-known attributes of ETFs—are more
valued than ever, often prompting investment teams to initiate
or increase ETF usage.
Aside from market conditions, the maturity of the ETF
industry has also played a key role. No longer the new kid on
the block, the ETF vehicle has been battle-tested in a variety
of environments. With roughly $6Tn in assets and over 3,000
different listings in the US alone1, a vast array of choices—from
thematic strategies to duration-specific solutions—has piqued
the interest of investment teams.
Are there certain institutional investors that have been
larger adopters than others?
Broadly speaking, larger public and corporate pension plans
with in-house investment teams tend to be natural ETF
adopters as they are already equipped to transact in securities
and have well-honed processes in place. Their first ETF trade
may require their trading desk or custodian having a call with an
issuer’s capital markets team to iron out the details, but ETFs
oftentimes quickly find a place in their investment toolkit.
For other plans using a fully or partly outsourced model,
adoption tends to be slower and more localized. For instance,
the desire to add a specific exposure may prompt due diligence
on a corresponding ETF, either because it is the only format
available or because the allocation is not large enough to
warrant a separate account.
Their consultant, Outsourced Chief Investment Officer (OCIO), or
manager can often accompany them through that process.
How can ETFs be an effective implementation tool in the
context of strategic vs. tactical allocations?
We’ve noticed that while the catalyst for first-time use is
often tactical (desire to implement an opportunistic view,
interim exposure during a transition, etc.), it often leads to
more strategic use cases where ETFs are another core building
block. ETF usage can also blur the lines between strategic
and tactical—for instance, when they help facilitate dynamic
rebalancing or when they are used to apply intentional regional,
sector or factor tilts. Common benefits of the ETF vehicle, which
we refer to as “The Four Ts” (Transparency, Trading Ease, Tax
Efficiency—although not applicable for tax-exempt pension
plans—and low Total Cost) can be effective in either context.
What makes ETFs attractive in the year ahead?
As we start the new year with continued volatility, the
versatility of ETFs, and in particular the liquidity, can help
investors navigate market uncertainty. A popular consideration
among risk managers is liquidity as both an offensive and
defensive tool. Not only can liquidity present a lifeline in
times of market turbulence, it also can allow investors to
avail themselves of attractive purchase opportunities or to
stay invested in compelling but less liquid areas. A common
portfolio management use case is to construct a “liquidity
sleeve” with ETFs as the building blocks. Allocating a portion
of assets to this sleeve can allow for smoother equitization and
management of cash. We’ve outlined several other use cases for
ETFs on the next page.
Source: Goldman Sachs Asset Management. As of January 10, 2022. For discussion purposes only. 1. Source: Bloomberg. As of December 31, 2022.
CORPORATE PENSION QUARTERLY 4Q 2022: VERSATILITY AMID VOLATILITY
Goldman Sachs Asset Management
|
5
4. STRATEGY IN FOCUS: EXCHANGETRADED FUNDS
Liquidity, transparency, and variety (with over 3,000 US listings1)
make ETFs a versatile option for institutional investors.
Typically, an institutional investor’s first foray into ETFs is
often for liquidity management and tactical exposures given
the speed at which an investment can be executed. However,
there are a number of other applications that can make ETFs
an attractive investment vehicle, ranging from near-term
implementation, such as transition management, to longer-term
strategic asset allocation considerations.
Common Institutional Applications of ETFs
Asset Allocation
•
Cost-effective core building blocks
Tactical Exposure
•
•
Transition
Management
Implementation of short- to midterm views
Hedging / Risk
Management
Interim exposure
•
Sell short
•
Cash equitization
•
Use options
•
Alternative to futures
Bridge between two managers
during search mandate
Flexibility
•
Liquidity sleeve in less tradable
asset classes (e.g., high yield)
•
Tactical alpha-generation
•
•
Liquidity Solution
Ultra-short bond exposure with
intraday liquidity and incremental
yield potential
Portfolio
Completion
•
•
Gain exposure to hard-to-access or
highly specific markets
Satellite exposure
Collateral
Management
•
Certain short-term Treasury ETFs
are now accepted by CME Clearing
to meet initial margin requirements
Source: Goldman Sachs Asset Management. As of December 31, 2022. For discussion purposes only. 1. Source: Bloomberg. As of December 31, 2022.
CORPORATE PENSION QUARTERLY 4Q 2022: VERSATILITY AMID VOLATILITY
Goldman Sachs Asset Management
|
6
5. MARKET MONITOR
US Treasury Nominal Yield Curves
Yield (%)
5
Current
12/31/2021
Constant Maturity US Treasury Rates
12/31/2020
Yield (%)
5
1-Year Forward
4
4
3
3
2
2
1
1
0
3M 2 Yr
5 Yr
10 Yr
30 Yr
Investment Grade Corporate Bond Nominal Yields
Yield to Worst (%)
7
6
Long Corporates
Long AA
Long A
Long BBB
CURRENT
YTD CHANGE
5.59%
5.08%
5.35%
5.94%
2.49%
2.35%
2.43%
2.60%
30 Year
10 Year
5 Year
0
2019
CURRENT
YTD CHANGE
3.94%
3.83%
3.96%
2.05%
2.33%
2.70%
2020
2021
2022
US Treasury Nominal Interest Rate Swap Spreads
Spread Level (%)
2.5
CURRENT
YTD CHANGE
30 Year
10 Year
3 Month
-0.79%
-0.30%
0.20%
-0.31%
-0.41%
0.21%
2.0
1.5
5
1.0
4
0.5
0.0
3
-0.5
2
2019
2020
2021
2022
-1.0
2019
2020
2021
2022
Investment Grade Corporate Bond Spreads
Additional Investment Grade Bond Nominal Yields
Spread Level (%)
6
Yield (%)
7
5
4
Long Corporates
Long AA
Long A
Long BBB
CURRENT
YTD CHANGE
1.57%
1.06%
1.33%
1.93%
0.28%
0.16%
0.23%
0.37%
6
5
US Aggregate
Long Gov't/Credit
Long Treasuries
15+ STRIPS
CURRENT
YTD CHANGE
4.68%
4.91%
4.08%
4.08%
2.93%
2.32%
2.19%
2.13%
4
3
3
2
2
1
0
2019
1
2020
2021
2022
0
2019
2020
2021
2022
Source: Bloomberg and Goldman Sachs Asset Management. As of December 31, 2022. Past performance does not guarantee future results, which may vary. “Constant
Maturity” is the theoretical value of a US Treasury that is based on recent values of auctioned US Treasuries. “Investment Grade” is defined as bonds generally perceived to
have lower credit risk; bonds with a rating of BBB- (S&P) or Baa3 (Moody’s) or above. Long AA, Long A, and Long BBB refer to S&P credit ratings. “AA” refers to investment
grade securities with a very strong capacity to meet financial commitments. “A” refers to investment grade securities with a strong capacity to meet financial commitments,
but somewhat susceptible to economic conditions and changes in circumstances. “BBB” refers to investment grade securities with an adequate capacity to meet financial
commitments, but more subject to adverse economic conditions. Economic and market forecasts presented herein are for informational purposes as of the date of this
presentation. There can be no assurance that the forecasts will be achieved. Please see additional disclosures at the end of this presentation.
CORPORATE PENSION QUARTERLY 4Q 2022: VERSATILITY AMID VOLATILITY
Goldman Sachs Asset Management
|
7
6. ABOUT US
What We Do
We engage with institutional investors, combining
our insight and analytics with investment
products, to help clients solve complex asset and
risk management challenges. Whether evaluating
de-risking opportunities, broader plan design
questions or investment strategies, Goldman
Sachs Asset Management has the resources
and capabilities to help you assess, develop or
manage a defined benefit strategy.
Who We Are
We are tenured strategists, investors, former
actuaries and counselors that offer unbiased
advice and customized solutions for defined
benefit plans and defined contribution programs.
Analytics
Investment analytics to help plans monitor and assess plan
performance and risk position
Asset Management
Growth Portfolio Optimization
Guidance on strategies to potentially enhance risk-adjusted
returns in growth portfolios
Alternatives
Construct customized liability benchmarks and manage assets
to better match liabilities
Equity Risk Mitigation
Reshape the distribution of equities designed to provide
downside preservation with upside participation
Risk Management
Provide strategic guidance and asset and risk management
services to help plans facilitate a pension risk transfer
Partnership
Advisory and discretionary offering to help plans with
asset allocation, manager research and selection, portfolio
monitoring and rebalancing and administrative support.
Key personnel involved in our Pension Solutions effort are comprised of members of our Fixed Income, Multi Asset Solutions, and US Institutional teams, which are distinct
groups separated by informational barriers. The portfolio risk management process includes an effort to monitor and manage risk, but does not imply low risk. Reference to the
term “partnership” is not intended to connote a type of organizational structure or any type of legal relationship with Goldman Sachs. Rather, the term “partnership” is intended
to refer to a comprehensive relationship between Goldman Sachs and a client that incorporates a range of value added services.
CORPORATE PENSION QUARTERLY 4Q 2022: VERSATILITY AMID VOLATILITY
Goldman Sachs Asset Management
|
8
7. LIBRARY
GS Retirement & Investment Solutions
Retirement Solutions & Investments
January 2023
US CORPORATE PENSION REVIEW
AND PREVIEW: THE TIDE IS HIGH
January 6, 2023
SECURE ACT 2.0 OF 2022
EXECUTIVE SUMMARY
History will reflect that 2022 was a wild ride on many levels. US equities entered a bear market and many other equity
markets around the world suffered even larger drawdowns. Interest rates rose notably, credit spreads widened, the
US Treasury yield curve had its largest inversion in over 40 years, and fixed income investors saw some of their
largest annual losses ever. Conversations around whether the US will enter recession, and, if so, when and how
deep it would be, were pervasive.
Despite all of this, US corporate defined benefit (DB) pension plans are in their best shape in 15 years. According to
our analysis, aggregate system-wide funded status has risen to 100%, the first time it has ended a calendar year in a
fully or overfunded position since before the 2008 global financial crisis. While plan assets have declined significantly
due to the fall in both equity and fixed income values, liabilities have fallen even further. Per our estimates, rising
interest rates and widening credit spreads will likely allow plans to use accounting discount rates in excess of 5% at
the end of 2022, the highest in over 10 years.
Notwithstanding this position of strength, this is a crucial time for many plans and their sponsors. Some plans have
previously found themselves in overfunded positions in the past only to see surpluses dissipate based on financial
market movements, in particular with falling interest rates. Concerns around a potential recession are still quite high,
and the possibility of such a scenario is not insignificant. Indeed, in just six weeks after hitting a year-to-date high of
about 4.4%, yields on 30-year US Treasury bonds declined around 100 basis points (bps) before rising again towards
the end of the fourth quarter.
While the rise in funded levels is welcome news, some plans may face higher pension expense next year given the
mechanics of the calculations. And differences in accounting and Employee Retirement Income Security Act (ERISA)
funded status calculations could mean some plans may have higher contribution requirements despite the increase in
generally accepted accounting principles (GAAP) funded percentages.
As we recap the last 12 months, we also want to provide a look at the themes that we believe will be relevant for plan
sponsors in 2023.
SECURE ACT 2.0
On December 29, 2022, SECURE Act 2.0 was signed into law as part of the Consolidated Appropriations Act of 2023. “SECURE 2.0” follows the
SECURE Act of 2019 and is the second major piece of legislation impacting qualified retirement plans since the Pension Protection Act of 2006.
SECURE 2.0 consolidates three bills voted on over the course of the last year, including the Securing a Strong Retirement Act of 2022, Enhancing
American Retirement Now Act (EARN Act) and Retirement Improvement and Savings Enhancement to Supplement Healthy Investment for the
Next Egg (RISE & SHINE Act).
SECURE 2.0 has a broad range of new provisions (92 in total) and includes significant changes designed to help close existing gaps across the
retirement system. While the vast majority of provisions relate to defined contribution plans, there are several changes that impact the defined
benefit system as well. In many cases, these provisions extend the reforms and initiatives started nearly two decades ago with the Pension
Protection Act, as well as with SECURE 1.0 and the CARES Act. Certain provisions reflect how competing financial responsibilities are
interconnected with retirement savings and offer new mechanisms to help individuals manage pressing financial needs within their retirement
plan.
Some key provisions among the 90+ included in SECURE 2.0 are noted below. We expand on these and several others in the rest of this report.
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Expanded coverage & savings
Student loan repayment match feature
In-plan emergency savings feature
Department of Labor (DOL) lost and found database
Support of auto-portability across qualified retirement plans
Alleviating barriers to in-plan annuities
Pooled plan arrangements (MEPs/PEPs) and groups of plans
Increased cash-out limits
Extension of required minimum distribution (RMD) age
Rothification of certain contributions
Withdrawal features to support financial needs
Performance benchmarks for asset allocation funds (i.e., TDFs)
Collective investment trust (CIT) availability in 403(b) plans (securities law changes still needed)
529 contributions eligible for Roth IRA rollover
Pension plan related provisions
SECURE 2.0 will have a significant impact over the coming years. The variety of new provisions highlight the importance of retirement plans
continuing to evolve to help individuals navigate a broader set of financial obstacles to successfully prepare for retirement. We believe the impact
of SECURE 2.0 will be beneficial to retirement savers and widely felt in the long run.
This financial promotion is provided by Goldman Sachs Bank Europe SE.
Past performance does not predict future returns and does not guarantee future results, which may vary.
THESE MATERIALS ARE PROVIDED SOLELY ON THE BASIS THAT THEY WILL NOT CONSTITUTE INVESTMENT ADVICE AND WILL NOT
FORM A PRIMARY BASIS FOR ANY PERSON'S OR PLAN'S INVESTMENT DECISIONS, AND GOLDMAN SACHS IS NOT A FIDUCIARY WITH
RESPECT TO ANY PERSON OR PLAN BY REASON OF PROVIDING THE MATERIAL OR CONTENT HEREIN. PLAN FIDUCIARIES SHOULD
CONSIDER THEIR OWN CIRCUMSTANCES IN ASSESSING ANY POTENTIAL INVESTMENT COURSE OF ACTION.
GS Retirement & Investment Solutions
Goldman Sachs Asset Management
US Corporate Pension
Review and Preview 2023:
The Tide Is High
1
Goldman Sachs Asset Management
1
SECURE Act 2.0 of 2022
Defined Benefit EROA
Assumptions 2022:
Finding a Bottom?
Source: Goldman Sachs Asset Management. As of January 10, 2022. Screenshots are for illustrative purposes only.
CORPORATE PENSION QUARTERLY 4Q 2022: VERSATILITY AMID VOLATILITY
Goldman Sachs Asset Management
|
9
RISK CONSIDERATIONS
Equity securities are more volatile than bonds and subject to greater risks. Small and
mid-sized company stocks involve greater risks than those customarily associated
with larger companies.
Bonds are subject to interest rate, price and credit risks. Prices tend to be inversely
affected by changes in interest rates.
High yield fixed income securities are considered speculative, involve greater risk of
default, and tend to be more volatile than investment grade fixed income securities.
Investments in foreign securities entail special risks such as currency, political,
economic, and market risks. These risks are heightened in emerging markets.
An investment in real estate securities is subject to greater price volatility and the
special risks associated with direct ownership of real estate.
Investments in commodities may be affected by changes in overall market
movements, commodity index volatility, changes in interest rates or factors affecting
a particular industry or commodity.
Alternative investments often are speculative, typically have higher fees than
traditional investments, often include a high degree of risk and are suitable only
for eligible, long-term investors who are willing to forgo liquidity and put capital at
risk for an indefinite period of time. They may be highly illiquid and can engage in
leverage and other speculative practices that may increase volatility and risk of loss.
Alternative Investments by their nature, involve a substantial degree of risk,
including the risk of total loss of an investor's capital. Fund performance can be
volatile. There may be conflicts of interest between the Alternative Investment Fund
and other service providers, including the investment manager and sponsor of the
Alternative Investment. Similarly, interests in an Alternative Investment are highly
illiquid and generally are not transferable without the consent of the sponsor, and
applicable securities and tax laws will limit transfers.
GENERAL DISCLOSURES
THESE MATERIALS ARE PROVIDED SOLELY ON THE BASIS THAT THEY WILL NOT
CONSTITUTE INVESTMENT ADVICE AND WILL NOT FORM A PRIMARY BASIS FOR ANY
PERSON’S OR PLAN’S INVESTMENT DECISIONS, AND GOLDMAN SACHS IS NOT A
FIDUCIARY WITH RESPECT TO ANY PERSON OR PLAN BY REASON OF PROVIDING THE
MATERIAL OR CONTENT HEREIN. PLAN FIDUCIARIES SHOULD CONSIDER THEIR OWN
CIRCUMSTANCES IN ASSESSING ANY POTENTIAL INVESTMENT COURSE OF ACTION.
THIS MATERIAL DOES NOT CONSTITUTE AN OFFER OR SOLICITATION IN ANY
JURISDICTION WHERE OR TO ANY PERSON TO WHOM IT WOULD BE UNAUTHORIZED OR
UNLAWFUL TO DO SO.
Prospective investors should inform themselves as to any applicable legal
requirements and taxation and exchange control regulations in the countries of their
citizenship, residence or domicile which might be relevant.
Goldman Sachs does not provide legal, tax or accounting advice, unless explicitly
agreed between you and Goldman Sachs (generally through certain services offered
only to clients of Private Wealth Management). Any statement contained in this
presentation concerning U.S. tax matters is not intended or written to be used
and cannot be used for the purpose of avoiding penalties imposed on the relevant
taxpayer. Notwithstanding anything in this document to the contrary, and except
as required to enable compliance with applicable securities law, you may disclose
to any person the U.S. federal and state income tax treatment and tax structure of
the transaction and all materials of any kind (including tax opinions and other tax
analyses) that are provided to you relating to such tax treatment and tax structure,
without Goldman Sachs imposing any limitation of any kind. Investors should be
aware that a determination of the tax consequences to them should take into account
their specific circumstances and that the tax law is subject to change in the future or
retroactively and investors are strongly urged to consult with their own tax advisor
regarding any potential strategy, investment or transaction.
The portfolio risk management process includes an effort to monitor and manage
risk, but does not imply low risk.
Past performance does not guarantee future results, which may vary. The value of
investments and the income derived from investments will fluctuate and can go
down as well as up. A loss of principal may occur.
The views expressed herein are as of 9/30/2022 and subject to change in the future.
Individual portfolio management teams for Goldman Sachs Asset Management may
have views and opinions and/or make investment decisions that, in certain instances,
may not always be consistent with the views and opinions expressed herein.
This information discusses general market activity, industry or sector trends, or other
broad-based economic, market or political conditions and should not be construed
as research or investment advice. This material has been prepared by Goldman Sachs
Asset Management and is not financial research nor a product of Goldman Sachs
Global Investment Research (GIR). It was not prepared in compliance with applicable
provisions of law designed to promote the independence of financial analysis and
is not subject to a prohibition on trading following the distribution of financial
research. The views and opinions expressed may differ from those of Goldman Sachs
Global Investment Research or other departments or divisions of Goldman Sachs
and its affiliates. Investors are urged to consult with their financial advisors before
buying or selling any securities. This information may not be current and Goldman
Sachs Asset Management has no obligation to provide any updates or changes.
Economic and market forecasts presented herein reflect a series of assumptions
and judgments as of the date of this presentation and are subject to change without
notice. These forecasts do not take into account the specific investment objectives,
restrictions, tax and financial situation or other needs of any specific client. Actual
data will vary and may not be reflected here. These forecasts are subject to high
levels of uncertainty that may affect actual performance. Accordingly, these
forecasts should be viewed as merely representative of a broad range of possible
outcomes. These forecasts are estimated, based on assumptions, and are subject to
significant revision and may change materially as economic and market conditions
change. Goldman Sachs has no obligation to provide updates or changes to these
forecasts. Case studies and examples are for illustrative purposes only.
Although certain information has been obtained from sources believed to be reliable,
we do not guarantee its accuracy, completeness or fairness. We have relied upon and
assumed without independent verification, the accuracy and completeness of all
information available from public sources.
This material is provided for informational purposes only and should not be
construed as investment advice or an offer or solicitation to buy or sell securities.
This material is not intended to be used as a general guide to investing, or as a source
of any specific investment recommendations, and makes no implied or express
recommendations concerning the manner in which any client’s account should or
would be handled, as appropriate investment strategies depend upon the client’s
investment objectives.
Any reference to a specific company or security does not constitute a
recommendation to buy, sell, hold or directly invest in the company or its securities.
It should not be assumed that investment decisions made in the future will be
profitable or will equal the performance of the securities discussed in this document.
Company names and logos, excluding those of Goldman Sachs and any of its affiliates,
are trademarks or registered trademarks of their respective holders. Use by Goldman
Sachs does not imply or suggest a sponsorship, endorsement or affiliation.
Index Benchmarks
Indices are unmanaged. The figures for the index reflect the reinvestment of all
income or dividends, as applicable, but do not reflect the deduction of any fees or
expenses which would reduce returns. Investors cannot invest directly in indices.The
indices referenced herein have been selected because they are well known, easily
recognized by investors, and reflect those indices that the Investment Manager
believes, in part based on industry practice, provide a suitable benchmark against
which to evaluate the investment or broader market described herein.
Standard & Poor’s (S&P) 500 Index is Standard & Poor's Composite Stock Prices Index
of 500 stocks, an unmanaged index of common stock prices.
Bloomberg US Aggregate Bond Index represents an unmanaged diversified portfolio
of fixed income securities, including US Treasuries, investment grade corporate
bonds, and mortgage backed and asset-backed securities.
Bloomberg US Corporate Investment Grade Index includes publicly issued US
corporate and specified foreign debentures and secured notes.
US Treasury Bond is a debt obligation backed by the United States government and its
interest payments are exempt from state and local taxes. However, interest payments
are not exempt from federal taxes.
United Kingdom: In the United Kingdom, this material is a financial promotion and
has been approved by Goldman Sachs Asset Management International, which is
authorized and regulated in the United Kingdom by the Financial Conduct Authority.
European Economic Area (EEA): This material is a financial promotion disseminated
by Goldman Sachs Bank Europe SE, including through its authorised branches
("GSBE"). GSBE is a credit institution incorporated in Germany and, within the Single
Supervisory Mechanism established between those Member States of the European
Union whose official currency is the Euro, subject to direct prudential supervision
by the European Central Bank and in other respects supervised by German Federal
Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufischt,
BaFin) and Deutsche Bundesbank.
Switzerland: Switzerland: For Qualified Investor use only – Not for distribution
to general public. This is marketing material. This document is provided to you
by Goldman Sachs Bank AG, Zürich. Any future contractual relationships will be
entered into with affiliates of Goldman Sachs Bank AG, which are domiciled outside
of Switzerland. We would like to remind you that foreign (Non-Swiss) legal and
CORPORATE PENSION QUARTERLY 4Q 2022: VERSATILITY AMID VOLATILITY
Goldman Sachs Asset Management
|
10
regulatory systems may not provide the same level of protection in relation to client
confidentiality and data protection as offered to you by Swiss law.
Asia excluding Japan: Please note that neither Goldman Sachs Asset Management
(Hong Kong) Limited (“GSAMHK”) or Goldman Sachs Asset Management (Singapore)
Pte. Ltd. (Company Number: 201329851H ) (“GSAMS”) nor any other entities involved
in the Goldman Sachs Asset Management business that provide this material and
information maintain any licenses, authorizations or registrations in Asia (other than
Japan), except that it conducts businesses (subject to applicable local regulations)
in and from the following jurisdictions: Hong Kong, Singapore, Malaysia, India and
China. This material has been issued for use in or from Hong Kong by Goldman Sachs
Asset Management (Hong Kong) Limited, in or from Singapore by Goldman Sachs
Asset Management (Singapore) Pte. Ltd. (Company Number: 201329851H) and in or
from Malaysia by Goldman Sachs (Malaysia) Sdn Berhad (880767W).
Australia: This material is distributed by Goldman Sachs Asset Management
Australia Pty Ltd ABN 41 006 099 681, AFSL 228948 (‘GSAMA’) and is intended
for viewing only by wholesale clients for the purposes of section 761G of the
Corporations Act 2001 (Cth). This document may not be distributed to retail clients
in Australia (as that term is defined in the Corporations Act 2001 (Cth)) or to the
general public. This document may not be reproduced or distributed to any person
without the prior consent of GSAMA. To the extent that this document contains any
statement which may be considered to be financial product advice in Australia under
the Corporations Act 2001 (Cth), that advice is intended to be given to the intended
recipient of this document only, being a wholesale client for the purposes of the
Corporations Act 2001 (Cth). Any advice provided in this document is provided by
either of the following entities. They are exempt from the requirement to hold an
Australian financial services licence under the Corporations Act of Australia and
therefore do not hold any Australian Financial Services Licences, and are regulated
under their respective laws applicable to their jurisdictions, which differ from
Australian laws. Any financial services given to any person by these entities by
distributing this document in Australia are provided to such persons pursuant to the
respective ASIC Class Orders and ASIC Instrument mentioned below.
• Goldman Sachs Asset Management, LP (GSAMLP), Goldman Sachs & Co. LLC (GSCo),
pursuant ASIC Class Order 03/1100; regulated by the US Securities and Exchange
Commission under US laws.
• Goldman Sachs Asset Management International (GSAMI), Goldman Sachs
International (GSI), pursuant to ASIC Class Order 03/1099; regulated by the
Financial Conduct Authority; GSI is also authorized by the Prudential Regulation
Authority, and both entities are under UK laws.
• Goldman Sachs Asset Management (Singapore) Pte. Ltd. (GSAMS), pursuant to ASIC
Class Order 03/1102; regulated by the Monetary Authority of Singapore under
Singaporean laws
• Goldman Sachs Asset Management (Hong Kong) Limited (GSAMHK), pursuant to
ASIC Class Order 03/1103 and Goldman Sachs (Asia) LLC (GSALLC), pursuant to ASIC
Instrument 04/0250; regulated by the Securities and Futures Commission of Hong
Kong under Hong Kong laws
No offer to acquire any interest in a fund or a financial product is being made to you
in this document. If the interests or financial products do become available in the
future, the offer may be arranged by GSAMA in accordance with section 911A(2)(b) of
the Corporations Act. GSAMA holds Australian Financial Services Licence No. 228948.
Any offer will only be made in circumstances where disclosure is not required under
Part 6D.2 of the Corporations Act or a product disclosure statement is not required to
be given under Part 7.9 of the Corporations Act (as relevant).
Canada: This presentation has been communicated in Canada by GSAM LP, which
is registered as a portfolio manager under securities legislation in all provinces
of Canada and as a commodity trading manager under the commodity futures
legislation of Ontario and as a derivatives adviser under the derivatives legislation
of Quebec. GSAM LP is not registered to provide investment advisory or portfolio
management services in respect of exchange-traded futures or options contracts
in Manitoba and is not offering to provide such investment advisory or portfolio
management services in Manitoba by delivery of this material.
Japan: This material has been issued or approved in Japan for the use of professional
investors defined in Article 2 paragraph (31) of the Financial Instruments and
Exchange Law by Goldman Sachs Asset Management Co., Ltd.
Confidentiality
No part of this material may, without Goldman Sachs Asset Management’s prior
written consent, be (i) copied, photocopied or duplicated in any form, by any
means, or (ii) distributed to any person that is not an employee, officer, director, or
authorized agent of the recipient.
©2023 Goldman Sachs. All rights reserved.
Date of First Use: January 25, 2023. Compliance Code: 303711-OTU-1727703.
CORPORATE PENSION QUARTERLY 4Q 2022: VERSATILITY AMID VOLATILITY
Goldman Sachs Asset Management
|
11
EXPLORE MORE RETIREMENT
INSIGHTS ON GSAM.COM