“However beautiful the strategy, you should occasionally look at the results.”
– Winston Churchill
Pension America has been approaching the management of DB plans the same way for more than 50 years. My colleague, Larry Zielinski, likes to call it pension orthodoxy. Well, given that Funded Ratios continue to fall, while contribution costs rise, I’d say that it is about time that we look at the results! If not now? When?
The focusing on the ROA to drive asset allocation and investment structure decisions has to stop! It isn’t working, and trying to hit the ROA in the next 5-10 years will likely prove more daunting than it has been in the last 15 years. We need to preserve and protect DB plans, but doing the same thing over and over again despite the poor results is just silly!
Call us, write to us, visit us, and / or ask us to visit you. We can help, but don’t expect us to follow the same path. Our path is definitely the one less followed!