Introduction In our last chapter, we examined how investment strategy can be aligned with liability needs. This final installment addresses the governance gap, where trustees, actuaries, consultants, and money managers operate in silos, undermining coordinated risk management. We propose a framework for fiduciary oversight and strategic alignment. Here’s the paper: Read more
Introduction Building on our previous discussion of sequence risk, this chapter focuses on actionable strategies to mitigate its impact. We explore how Liability-Driven Investing (LDI) and Cash-Flow-Driven Investing (CDI) can serve as strategic shields against forced liquidation and funding deterioration. Here’s the paper: Strategic Shields – LDI, CDI, and Liquidity Read more
IntroductionMany actuaries and investment consultants provide trustees with simple projections to show where the financial status of the plan is heading. However, in many cases, these projections are based on simple assumptions which everyone knows will be wrong, but they are used for decision making purposes. The problem is these Read more
This first installment in our whitepaper series introduces the foundational challenge facing mature pension plans: negative cash flow. When benefit payments regularly surpass incoming contributions, trustees encounter a structural issue that may affect a plan’s funded status. This paper explores the mechanics of sequence of returns risk – a phenomenon Read more
This is another type of defined benefit plan that provides lifetime income to the participants of the plan. Some have called these hybrid plans but they are not considered hybrid plans under the IRS regulations. In some cases, if the hurdle rate is set low enough, the plans are subject Read more
These plans have been around for a long time, but are now being viewed negatively by employers. Much of that is due to not being aware of how to best manage the growing risks inherent in these plans. Without proper modeling, it is difficult to take proper action and mitigate Read more
Defined benefit (DB) pension plans have many risks and, unfortunately, these risks are not always addressed and managed appropriately. In some cases, plan sponsors move to defined contribution (DC) plans as they feel these are risk-free but there is no such thing as a risk-free plan. It comes down to Read more
This white paper discusses a couple of new adjustable pension plan designs available to plan sponsors and the rationale for why they should be considered. · For years employers contributing to Defined Benefit Pension Plans have been wary of the risks associated with these plans.· With the national move Read more