Attractive returns have always been a selling point for plan sponsors, having led many to seek solace in fixed-income. Samuel Austin, senior portfolio advisor with Seneca Capital Management contends that continues to be the case, with one slight amendment. Pension funds are now eyeing "alternative" fixed-income opportunities CLOs and CDOs.

For instance, the asset manager is currently fine tuning its $300 million Nob Hill II CLO offering, which it expects to price and close during the first quarter. Seneca Capital is also gearing up to bring a CDO-of-CDOs, or CDO-squared, to market midyear, Austin said.

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