LDI 2.0
Defined benefit plan sponsors are branching out from the traditional equity/bond liability-driven investing (LDI) portfolio, adding diversification as well as addressing short-term cash flow needs.
Tag: LDI
Interest Rates, Recessions and Pension Plan De-Risking
Bob Browne, CIO at Northern Trust, argues that pension plan sponsors should not wait to de-risk their plans based solely on the assumption that interest rates will rise.
Q4 2018 Volatility Leads DB Sponsors to Focus More on Risk
Asked what they plan to look for in asset management searches in the next 12 months, the majority of mid-sized defined benefit (DB) plan CIOs said better risk-adjusted returns, and they plan to turn to private equity, real estate and hedge funds.
Risk Transfer Floodgates Hold, For Now
Even with the documented acceleration of de-risking activity, Tom McCartan at PGIM Fixed Income notes that less than 1% of U.S. private pension plan assets and liabilities have been formally transferred to insurers.
Lessons From 403(b)s When It Comes to LDI in DC Plans
The analog of defined benefit liability-driven investing on the defined contribution plan side is the discussion of in-plan guaranteed retirement income.
Pension Experts Urge LDI Considerations, Stress Tests in 2019
Pension plan sponsors can avoid giving back recent gains in funded status if and when another recession strikes by implementing liability-driven investing (LDI) principals.
LDI Strategies and Preparing DB Plans for Recessions
Speakers on a PGIM Fixed Income webcast offered practical steps pension plan sponsors can take today and over time to protect funding levels; they suggested liability-driven investing is a smart way to “get off the funded-status rollercoaster.”
Pension Investment De-Risking Primer
Sterling Price, managing consultant at Findley, discusses how LDI and a dynamic investment policy help to de-risk pension plan assets.
Weyerhaeuser Takes Steps to Reduce Pension Liabilities
The company is offering a lump-sum window, transferring some liabilities to a group annuity, making a contribution to its pension plan and transitioning to a liability-matching investment allocation.
Your DB Funded Status Has Improved? Now What?
Corporate DB plans have experience funded status improvement, and LDI strategies help plan sponsors preserve this; however, investment committees are looking for new asset classes that can provide greater returns at a reasonable level of risk.
Post-Crisis Pension Portfolios Include More Fixed Income, LDI Strategies
Equity prices have strongly recovered since the Great Recession, bringing some benefit to corporate pension funded status, but pension plan sponsors have still faced periods of unprecedented volatility, a prolonged slowdown in global growth, and historically low interest rates.
DB Plans Accelerating Contributions Due to Tax Reform
This enables corporations to expense their contributions at a higher tax rate, according to Cerulli.
Cerulli Report Maps LDI and OCIO Opportunities
Alexi Maravel, director of Cerulli’s institutional practice, observes that the LDI topic is “probably the most competitive pricing environment among the different types of institutional custom solutions available today.”
More DB Plans Using LDI Strategies
Eighty-one percent of pension plan professionals say funded status volatility is their top motivating factor for pursuing an LDI strategy.
Retirement Industry People Moves
T. Rowe Price Names Senior DC Specialist; Vanguard Rotates Portfolio Managers; American Century Preps for Major ETF Business Launch; and more.
For Some DB Plan Types IDL, Not LDI, Is the Answer
John Lowell, with October Three, says for two types of DB plans, investment-driven liabilities (IDL) is almost risk free for plan sponsors and provides more meaningful benefits to participants.
What DB Plan Sponsors Need to Know
Six essential DB strategies
LDI Still a Viable DB Plan Derisking Strategy
Despite market volatility and a continued low interest rate environment, DB plan sponsors can still establish an effective LDI strategy to derisk their plans.
Small Pension Plan Sponsors Fully Embrace PRT Transactions
Nearly 85% of pension plans paying PBGC premiums have less than 1,000 participants—so it only makes sense that small plans make up a significant proportion of the ERISA industry’s annual risk transfer business.
Aligning Stakeholder Interests in Pension Buyouts
A lot of parties are involved in even a modestly sized pension risk transfer deal; aligning their interests, timelines and incentives for success is no small task.