2010 is all about Pension Funding Volatility Controls

An SEI news release said 91% of sponsors polled identified the volatility issue as a key goal for the year, while 33% of respondents went a step further to identify it as an extremely high priority.

Meanwhile, according to SEI,  90% of respondents cited developing a strategy for improving their funded status as a priority in 2010,  with 71% saying it was at least a “high” priority.

“As pension plans continue to negatively impact organizational finances, all of these strategies should be priorities this year, but successfully executing them will be a significant challenge,” said Jon Waite, Director, Investment Management Advice and the Chief Actuary for SEI’s Institutional Group, in the news release.

Additional priorities cited in the poll include:

• Providing senior management or their Board with a long-term pension strategy;
• Gaining the ability to most effectively manage duration;
• Conducting an asset-liability study;
• Implementing a Liability Driven Investing (LDI) approach using long-duration bonds;
• Stress testing the portfolio to gauge its ability to withstand extreme macro economic environments;
• Evaluating a different approach for investment management;
• Changing funding policies and timelines; and
  
• Defining fiduciary responsibilities for trustees and investment consultants.

The poll was completed by 54 executives who oversee pensions ranging from $250 million to $10 billion in assets.

Summaries of the poll are available by emailing seiresearch@seic.com