Most corporate DB plans continue to follow a risk-on strategy, which has not worked well for the last 20 years. We question the prudence of continuing to rely on this strategy and mentality.
Every defined-benefit (DB) pension plan aspires to fulfill its obligations to beneficiaries. In order to do that, it needs to achieve and sustain 100% funded status now or at some point in the future.
This paper presents a risk-factor approach to Liability Driven Investing (LDI) and analyzes the sensitivities of both pension liabilities and assets to these factors.
Managing investment risk may seem to be the most difficult when markets move rapidly and volatility is high. In practice, however, it is often low volatility environments that are more challenging to navigate.
At a pension plan conference not long ago, a plan manager asked, "Why can't I just forget about de-risking and behave like a long-run investor: maximizing expected total return?
Astute investors have a keen appreciation of the risks they face. To better understand the risk/reward tradeoffs being offered today we will examine history to understand the context of past market performance...
A Defined-Benefit (DB) pension plan’s obligations to its beneficiaries are estimated by applying assumed mortality rates to the plan's census of beneficiaries, both active and retired.
In pension management as in life, simple is usually better. There are all kinds of complex fixed-income strategies a plan can engage in to reduce risk...
A pension plan’s assets need to achieve a total return that matches or exceeds that of its liabilities. Merely achieving asset returns that fluctuate in line with liability returns...
Our defined-benefit (DB) pension clients have recently shown increased interest in pursuing liability driven investing (LDI) strategies to reduce the tracking error between their plan assets and the valuation of their liabilities.
Watch this short video to learn more about our LDI approach.
- LDI Brochure
- 2016 Year in Review: US Long Credit
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- US Long Duration Full Discretion