By: Russ Kamp, Managing Director, Ryan ALM, Inc.

Given the improved funded status for most defined benefit pension plans, there is increased plan sponsor interest in reducing some of the risk from a traditional asset allocation. Asset Liability Management (LDI) is the process by which this objective can be implemented. We are pleased to provide you with an LDI checklist that provides you with some important questions that should be answered by prospective investment managers. We specifically discuss the two primary LDI strategies – cash flow matching and duration matching.

Hopefully these insights will prove most useful to you. There is also a plethora of additional research on how to de-risk a pension plan at https://www.ryanalm.com/white-papers. Lastly, don’t hesitate to reach out to us if we can be of any further assistance. Our experience in this space dates back to the 1970s.