"We do expect more shifts in allocations given the decreased levels of funding ratios," Chicago-based Van Etten added. Adding to their burden, the Society of Actuaries last year estimated retirees are living longer than just a decade ago, a factor the Internal Revenue Service is expected to adopt in 2017 when calculating pensions' future payouts.
Derisking Delay?
The shift into bonds by corporate pensions was part of a derisking process that began in the last three years as their obligations declined and funding levels improved.
The objective is to move 50 percent to 80 percent of pension assets into long-term bonds, usually corporate investment-grade debt.
But that goal may have to wait now, pension consultants say.
"What we have seen is a delay in moving into long-duration bonds while they're waiting for the long end of the (yield) curve to go higher and market conditions to improve," said Philadelphia-based Charles Tan, head of North American fixed income at Aberdeen Investments, managing more than $480 billion in assets.
Fed data showed that private pensions' bond purchases tumbled to $7.4 billion in the second quarter, from $56.5 billion in the first quarter.
One reason for the drastic decline in bond purchases, analysts say, is the expectation of an interest rate increase by the Fed, which diminishes the value of the bonds.
From 2012 to 2014, private pensions have amassed more than $250 billion in fixed-income debt.
At the end of last year, fixed-income allocation grew to 42.7 percent from 39.5 percent at the end of 2013, Milliman data show.