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What Do Pension Sponsors Want For Christmas?
When asked this question, most pension sponsors would answer lower or stable pension cost and lower volatility on funded status, yet the asset allocation of most pension plans is...
Bond Yields… Caveat Emptor
Most bonds are priced and traded on some yield calculation. These yield calculations are based on assumptions that are difficult, if not impossible, to achieve. For example: Yield to Maturity...
Problem/Solution: Asset-only Focus
Most, if not all asset allocation models are focused on achieving a total return target or hurdle rate… commonly called the ROA (return on assets). This ROA target return is derived from a weighting of…
Problem/Solution: Generic Indexes
Problem: Find Pension Liabilities in any Generic Bond Index Solution: Custom Liability Index (CLI) Pension liabilities are unique to each plan sponsor… different salaries, benefits, expenses, contributions, mortality, inflation assumptions,...
How Bonds Can Enhance the ROA
Given the volatility and uncertainty of the financial markets, bonds can provide Pension Plan Sponsors a strategy to mitigate some of that volatility. Bonds, through the certainty of their cash...
Pension Conundrum - Liquidity Risk
Liquidity is a critical and necessary priority of a pension fund, since it must fund monthly benefits and expenses (B + E) on time. Many plan sponsors use a “cash...
Magnificent 7: Caveat Emptor!
As pension watchdogs, Ryan ALM is always interested and concerned about trends that may affect the funded status of pensions. Since the major asset holding of most pensions is the...
Ryan ALM Pension Monitor 3Q’22
3Q 2022 Ryan ALM Pension Monitor (Through September 30, 2022) Pension plan liabilities need to be measured and monitored regularly. Without knowledge of plan liabilities, the allocation of plan assets...
Ryan ALM Pension Monitor 3Q ‘21
Ryan ALM Pension Monitor (Through September 30, 2021) Pension plan liabilities need to be measured and monitored regularly. Without knowledge of plan liabilities, the allocation of plan assets cannot be...
Best way to hedge pension inflation
Ronald J. Ryan, CFA, CEO July 2020 Executive Summary Pension inflation is what a plan sponsor agrees to as a cost of living adjustment (COLAs) benefit increase for retired lives...
The Role of Bonds in Pension Asset Allocation
Custom Liability Index (CLI) The first step in prudent pension management is to install a Custom Liability Index (CLI) to calculate and monitor the present and future value term structure,...