After volatile markets ravaged the assets in defined-benefit pension plans over the last couple of years, companies are reshaping their investment strategies and paying closer attention to the risks involved in operating pension plans.

"The premise is that you need to develop investment strategies that are not just based blindly on the asset side, but also incorporate many other factors, notably the funded status," says Ari Jacobs, North American retirement solutions leader at Hewitt Associates.

A plan that's 70% funded should take a different approach from one that's 130% funded, Jacobs says. "A plan that is fully funded should really act quickly and swiftly to ensure that they lock in that funded status and not continue to take on equity risk they may not be rewarded for."

Complete your profile to continue reading and get FREE access to Treasury & Risk, part of your ALM digital membership.

Your access to unlimited Treasury & Risk content isn’t changing.
Once you are an ALM digital member, you’ll receive:

  • Thought leadership on regulatory changes, economic trends, corporate success stories, and tactical solutions for treasurers, CFOs, risk managers, controllers, and other finance professionals
  • Informative weekly newsletter featuring news, analysis, real-world case studies, and other critical content
  • Educational webcasts, white papers, and ebooks from industry thought leaders
  • Critical coverage of the employee benefits and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

Corporate Finance
Retirement & Benefits