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Replicating Private Equity

Private Equity is illiquid and challenging to benchmark. Many investors use “S&P 500 +3%” in order to compare performance in the absence of an observable, investable asset. This paper describes a methodology for creating a private equity proxy or replication strategy using derivatives.

Next Steps After an Annuity Purchase

You’ve just completed an annuity purchase for your pension plan; so what’s next for the plan? Now is a good time to build a strategy for your plan which will differ depending on your funded status.

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.

Does Your Company Need To Strengthen Its Employer-Provided Retirement Program? Why? How? What Could Happen If You Don’t?

So, you have a solid 401(k) savings plan. It’s competitive in your industry. It’s not preventing you from attracting new recruits. But, does the plan help you retain key employees or, maybe more importantly, encourage employees to retire in a timely...

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.

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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...

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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.

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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.

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