Pension Derisking Comes of Age
As the funded status of corporate defined benefit plans improved over the past few years through a combination of cash contributions and the bull market in stocks, more plan sponsors moved to implement pension derisking or liability-driven investing strategies to cordon off at least a portion of their liabilities. While some still use basic strategies, the conversations about pension derisking have become more sophisticated as plan sponsors have learned more about the critical relationship between assets and liabilities. In this round table discussion, Gary Veerman, head of LDI solutions at Capital Group, François Pellerin, an LDI strategist in the fixed-income division at Fidelity Management & Research Co., and James So, a product specialist at Western Asset Management Co., discuss how plan sponsors are approaching pension derisking, what mistakes they often make and what the future holds.
Gary Veerman, Head of LDI Solutions, Capital Group; François Pellerin, LDI Strategist, Fixed-Income Division, Fidelity Management & Research Co.; James So, Product Specialist, Western Asset Management Co.