r/stockmarket
Pension Funds are Likely Behind the Dump in Tech
Pension funds' automated 'degliding' to lock in gains drives temporary tech selling, a technical dip rather than a fundamental downturn.
- Pension funds are highly funded at 110%, indicating strong underlying market health.
- The current selling is merely technical housekeeping and pre-programmed rebalancing, not driven by deteriorating fundamentals.
- Pension funds are undergoing 'degliding', automatically shifting massive capital from risky stocks to safer bonds.
- This pre-programmed shift creates a significant wave of automated stock selling, causing temporary downward pressure on the market.
The top 100 U.S. pension funds are currently 110% funded, meaning they are in a great position, with $1.10 available for every $1.00 they owe to future retirees.
Because they have plenty of assets and want to protect these gains from a market correction, they are undergoing a process called degliding.
This means they are automatically shifting their strategy away from risky growth assets like stocks and moving that money into safer and more predictable investments like bonds to lock in their gains.
This massive, pre-programmed shift creates a wave of automatic stock selling and bond buying that can cause a temporary dip in the market, but it is basically technical housekeeping.
Good, my pension relies on them not being idiots
Exactly
I want my friends with pensions
To not get fucked
Happy for u boss
Fellow pension person here. Ty! I work in public service - and honestly the pension is the biggest reason I stay. I’m in IT. I earn about $65K less in the public sector than my counter parts in the private sector. Two of my fellow team mates left our department over the last few years to chase the dollar. They found it. $65k more base pay, but 55-60 hour standard work weeks as well as no pension.
Their money is nice. And they have some hella nice trucks, RV’s, and even some small boats. But I can’t imagine that kind of work schedule and stress that they are under.
It’s all a trade off - and honestly - I like the lower pay, higher security, better work-life balance position. Other people hate it and would rather have the money.
I don’t have a pension. But that’s because I’ll only accept one from the gov’t
I won’t do a private one after what happened with GM
I knew it was the pension funds! Even when it was the bears I knew it was the pensions.
Those are exactly my sentimonies!
Let the bears pay the bear tax!
Not sure I buy that. Why stopped them from doing this last quarter, or a year ago? Why would they all suddenly rebalance in the last week?
Because lots of the semi conductor funds have had a massive run up recently compared to their normal performance.
When such a run up happens it’s different than the normal gains - so it’s worth it to protect the profits.
Yeah but all of them doing it precisely at the same exact time?
Sounds like a cartel to me.
It's because they have to rebalance at the end of the quarter
Most big plans these days would go more frequently than quarterly if they got out of band for their funded percentage. 10-15 years ago on a billion dollar plan we had daily visibility and would immediately rebalance if we got more than 5% from our target. The move up to 7500 might have caused some but it's sideways since then and seems crazy they'd all wait until end of June.
degliding
I worked for 30 years in the pension industry with some of the nations largest pension funds ... this isn't even a word let alone a term used regarding pension funding. Google search it and this post is the first link. So if OP is pulling words out of his ass you might consider what else he will find in that deep dark space.
That said, for sure pension funds are likely to move to less risky profiles as their future funding levels become more secure. As for "technical housekeeping"? Hilarious. Money is money, and pensions have so very much that if they start moving a certain direction then it is consequential, not something to wave your hands over and imply it is just a blip. He says it "is massive"!!! but just a "temporary blip as if obviously there is some hoard of cash somewhere that will quickly fill the void.
The fact is is that current markets are at historic levels of high valuation on so many different measures that it is inarguable this is one of the 3 or 4 most overvalued times in market history. The fact, perhaps, that pension funds may be derisking (is this the term OP meant? Hmm) is something that all individual investors should consider for themselves rather than chasing 0dte options like fucking idiots.
is this top 100 including or excluding public plans?
i haven't checked in in a while but it was always the case that so many public plans were so woefully underfunded, i have to assume this is only private?
You're correct, this is the 100 largest corporate DB plans. You can see the listing in Figure 2 here: https://www.milliman.com/en/insight/2026-corporate-pension-funding-study