If you’ve been focusing more on your firm’s investment policies, you’re not alone. The battering investors have taken in the stock market – the S&P 500 is finally inching back to levels last seen in 2002 – has prompted many institutional investors to examine just where they’re placing their money. According to the annual review by Pensions & Investments, the funded status of the 100 largest pension plans slid 30 percent in 2008, eliminating the past 5 years’ gains.

More than half the respondents to a recent Greenwich Associates survey have reviewed or changed their policies in the last 12 months. Cutting volatility while boosting predictability appear to be the primary goals. Among those participating in the survey were 97 corporate pension funds, 34 public funds, and 21 endowments.

Some of the most significant changes Greenwich noted:

• About two-thirds of corporate plan sponsors boosted allocations to fixed income investments.

• International equities also gained favor, with about 20 percent of corporate plan sponsors shifting funds there.

• Of course, the boost to fixed income and international investments had to come from somewhere. In most cases, it was domestic equity. More than three-quarters of corporate plan sponsors cut allocations there.

• In another effort to force greater predictability, more companies are closing their defined benefit plans to new employees and reducing contributions to 401(k) and other defined contribution plans.

• About one in five surveyed moved from an active to passive investment management style. At this point, it’s unclear whether the shift is simply a way to park funds the institutions have moved from managers and strategies whose results were less-than-stellar, or a more permanent change in strategy. ###