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 emphasis on pension risk management is appropriate and overdue, however, we do not believe this to be the only approach or necessarily the best solution to prudent risk management required of plan fiduciaries today. While LDI strategies more accurately match plan assets and liabilities reducing mismatch risk, they only nominally reduce financial risk and do not eliminate longevity risk. Let our team of experts examine your plan and help execute a liability monitoring and risk reduction 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 in full today or no a systematic basis over a period of years.