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Pension Investing – Next Generation of Glide Paths

Pension Investing – Next Generation of Glide Paths

Pension plan sponsors, especially those with frozen pension plans, have spent significant time deciding on the most appropriate balance between growth (return seeking/equities) and hedging (liability matching/long-term bonds) assets to meet their objectives. For most, the ideal goal is to fully fund the pension plan through a balance of investment performance, cash contributions and a rising interest rate environment while not subjecting themselves to higher than desired funded status risk.

Retirement Update – November 2018

Retirement Update – November 2018

October saw some of the worst equity market performance in recent years, although there has been some recovery into November. The negative impact on funded status due to equities would have been offset to a degree by rising interest rates throughout the month.

Retirement Update – October 2018

Retirement Update – October 2018

There was no great place to invest during September. Fortunately for most pension plan sponsors, the decrease in plan liabilities will more than offset any losses due to poor asset returns. Plans heavily invested in large cap US stocks were best positioned to improve funded status in September, seeing a small equity return (~0.5%) combined with a 1-2% liability decrease.