Pension plan sponsors experienced severe funding shortfalls in years past and for most plan sponsors it has taken years to regain their plan funding positions through increased contributions and more favorable market conditions. The lessons learned through this have changed the perception for most plan sponsors of the reality that both pension asset and plan liabilities need to be viewed in tandem. Liability driven investing has become the generic term and paradigm used to reflect this new thinking and there are numerous approaches being offered as “solutions” in the market today.
We believe this emphasis is appropriate and long overdue, but we do not feel that this is the only nor the best solution to prudent risk management required of plan fiduciaries today. While these schemes do more accurately match plan assets and liabilities which will reduce mismatch risk they do not eliminate other financial or longevity risk. Let our team of experts examine your plan and help execute a liability monitoring strategy. Depending on the specific plan structure, funding status, liability duration and demographics, Dietrich will provide plan sponsors with pension liability reduction strategies to transfer pension risk on a prescribed systematic basis now or over a period of years.