While overseeing pension plans is increasingly complex and there’s no silver bullet solution, employing these four strategies can do much to reduce risk. CFOs at companies that offer defined benefits might be forgiven for feeling frustrated that, in addition to oversight responsibility for company financial performance, shareholder relations, accounting, tax, and myriad other functions, they […]
July 2019
Many corporate defined benefit plans experienced significant funded status gains in recent years. Recent capital markets volatility, however, has set many plans a few steps back, re-focusing plan sponsors on both protecting long-term funded status gains and closing the asset-liability deficit. Given increased volatility in global equity markets, relatively high valuations in many market segments, and the late stages of the economic and credit cycles, optimizing the plan’s growth engine is more critical, and challenging, than ever.
April 2019
While robust cash flows have strengthened healthcare system balance sheets in recent years, mounting industry pressures will likely threaten those flows in the future. We explore strategies to manage complexity, maximize the benefits of the Endowment Model, and prudently manage risk.
November 2018
In the November 2018 issue of Benefits Magazine, covering pension plan issues affecting multiemployer, single employer and public plan representatives, Investment Managing Director in Cambridge Associates’ Pension Practice, Joe Marenda, contributed an article discussing how hedge funds may play a role in protecting pension plans’ funded status in the event of a recession or stock […]
November 2018
Elevated equity market valuations and potentially rising bond yields suggest the return environment for traditional risk assets could be difficult. Faced with this challenge, institutional investors are seeking alternative sources of return. Alternative risk premia (ARP) strategies – which harvest well-established risk premia and market anomalies across asset classes – may fit the bill. ARP […]
October 2018
It is well known that corporate plan sponsors have until mid-September to make deductible contributions under the more favorable 35% corporate tax rate. This is an attractive proposition and one that many corporations are looking to leverage, if they haven’t already. But, with the boost in funded status from these voluntary contributions, perhaps less obvious […]
August 2018
Yes. Since fixed income derivatives are more capital efficient and flexible than physical bonds, they can play a key role in liability hedging for many corporate and other single-employer pension plans.
May 2018
For many pension plans, investment strategy is often structured with a liability-hedging portfolio and a growth portfolio, with the weight and composition of each determined by a strategic asset allocation or a de-risking glidepath. Within this overall structure, the construction and calibration of the liability-hedging portfolio is integral to effective pension asset management. This report […]
April 2018