asset management approach
+
+
+
The asset-liability study will drive a total portfolio multi-asset strategy (return seeking and LDI) based on the specifics of the pension plan. A proprietary projection model will forecast future contributions, pension expense and funded status scenarios for the pension plan based on a variety of asset allocations over a 10-year time horizon.
Asset-liability study
We set the specific liability hedge ratio for the LDI strategy based on key rate durations and sponsor desire to minimize interest rate risk and credit risk.
Risk minimization
Monitoring of funded status and key performance reporting statistics of the pension plan delivered in the Pension Report Card.
Pension Report Card
Monitoring of the holdings-level risk relative to the plan liability through our Surplus Risk Tool (SRT), which calculates the Value at Risk (VaR) and stress scenarios for pension plans.
Risk monitoring
Using knowledge gained from our 30+ years as an investment manager
Plan management approach
Using knowledge gained from our 40+ years as consultants with major pension plans
pension proficiency
Using our team of experienced and credentialed professionals
We seek out the world's top investment strategies and put them to work in your portfolio. Russell Investments' liability hedging funds are constructed using a combination of our award-winning manager research and internally managed strategies.
Manager research
We utilize a combination of Target Duration LDI, Treasury STRIPS, long government/credit, and derivative exposures (as appropriate) to construct a portfolio suited to meet an individual plan sponsor's liability hedging goal.
Portfolio construction
As one of the largest providers of derivative overlays, we have the ability to provide additional flexibility in LDI considerations. We are capital efficient in our hedging strategies which keeps more of your physical dollars working harder in other asset classes.
Derivative overlays
Funds and portfolios are managed dynamically to take advantage of and respond to market opportunities.
Flexibility
We serve as LDI completion manager as needed to provide oversight of third-party managers and seek to provide effective implementation of target strategies.
Implementation partner
We have been working with pension plans for over 40 years. Our team of credentialed actuaries conduct over 50 asset-liability studies per year which gives us insight into the challenges facing today’s plan sponsors and experience delivering solutions to help them meet their overall plan objectives.
Tenure & experience
In-depth knowledge of regional pension regulations and environment
Regional
savvy
Crucial knowledge of plan design and the impact on strategy and investments (different management strategies for open pension plans vs. closed or frozen plan design, cash balance plans, etc.)
Expert investors