Bundling has benefits. If you’ve followed my last few posts, you’ve seen how bundling a defined benefit (DB) plan with one service provider can mean cost and time savings, increased oversight and better overall service for the plan sponsor. Another advantage of bundling is eliminating a significant risk most plan sponsors may not even be aware of – the “Harriet factor”. Read more
Posts tagged ‘pension’
If you watch television around the holidays, you’re bound to come across one of the best (IMO) holiday movies ever made – A Christmas Story. One of my favorite parts is when Ralph’s mom gets his brother and him ready to go out and play in the snow. He was so bundled up that he could barely move.
Ralph’s mom definitely bought into the idea of bundling. Do you see where I’m heading? Yes, I want to talk about the benefits of bundling when it comes to defined benefit (DB) plans. (Wow, right?) Read more
Everybody loves cheap money, right? Well, if you’re a borrower, you’ve definitely benefited from actions taken by the Federal Reserve to keep interest rates at record lows.
What does Kenny Rogers have to do with pension plans? Well, nothing really. But as I sat down to write my LDI blog post, I thought about how many plan sponsors gamble with their pension plan investments.
As I mentioned in earlier posts, the behavior of the stock market has little to do with the way a defined benefit (DB) plan’s liabilities react. Yet many DB plan sponsors make big bets by allocating a large portion of their plan portfolios to stocks— without considering plan liabilities. (After all, “You’ve got to know when to hold ’em, know when to fold ’em.”) Read more
In my previous blog, I talked about risk as it relates to managing a defined benefit (DB) pension plan. The long and short of it is that risk is what happens when DB plan sponsors are busy making other assumptions.
Today, the combination of several factors—including market volatility, low interest rates and recent legislation—has created significant challenges for DB plan sponsors. Fortunately, the pension industry is helping plan sponsors manage these risks with a number of innovative approaches.