News

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.

read more
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.

read more
Pension Plan Annuity Purchase Update – Q2 2018

Pension Plan Annuity Purchase Update – Q2 2018

Market Activity Source: LIMRA Secure Retirement Institute Through the first half of 2018, pension buy-out sales are once again on a record-breaking pace. Q2 sales eclipsed $8.2 billion which brings year to date sales to $9.6 billion. If Q3 and Q4 sales...

read more
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.

read more
Pension De-Risking – The Next Evolution in Reducing Funded Status Risk

Pension De-Risking – The Next Evolution in Reducing Funded Status Risk

There has been an evolution of pension plan de-risking over the years, giving us 3 different versions. Many plan sponsors have avoided moving more quickly to de-risk using strategies 1-3 because of the negative impact that each of these can have on a sponsor’s reported profits as well as expected cash contributions to close a deficit. We are now poised for de-risking version 4.0, in which plan sponsors will utilize modern risk management tools to significantly reduce funded status volatility while maintaining expected returns.

read more