MassMutual Introduces LDI Evaluation Tool for DB Sponsors

December 13, 2011 ( - MassMutual has a new Pension Funding Scorecard to help defined benefit plan sponsors more effectively evaluate portfolio performance.

MassMutual’s Pension Funding Scorecard provides a quarter-by-quarter performance comparison for a liability-driven investing (LDI) portfolio versus a traditional 60% equity/40% fixed income portfolio against the MassMutual Pension Liability Index (MMPLI). The MMPLI is based on aggregating data from defined benefit plans on MassMutual’s Retirement Services platform. In addition, MassMutual’s Pension Funding Scorecard provides historical returns to help retirement plan advisers, plan administrators and chief financial officers make informed decisions about pension funding approaches.   

“We are seeing a clear trend among pension plan decision-makers to take a closer look at pension funding volatility. LDI can provide a more predictable approach to managing pension plan assets and liabilities,” says Marc Condon, assistant vice president and actuary, MassMutual’s Retirement Services Division. “The Pension Funding Scorecard provides a detailed picture of how well LDI portfolios have tracked pension liabilities compared to traditional 60/40 portfolios.”  

In recent years, LDI has achieved increasing attention for its ability to help mitigate the volatility and unpredictability of pension plan funding status. Proponents advocate that LDI can enable better management of cash flow and more effectively align asset and liability returns over time while streamlining plan administration. In addition, LDI can often help reduce concerns associated with downturns in the equity markets, an issue that has spurred heightened interest in LDI among CFOs and pension committees.  

In addition to reporting on portfolio performance, MassMutual’s Pension Funding Scorecard provides definitions of commonly used terminology and provides answers to frequently asked questions regarding liability-driven investing and pension funding in general.  

To request a copy of MassMutual’s Pension Funding Scorecard, contact a retirement plan adviser or MassMutual Retirement Services at 888-626-4911.