Defined Benefit Plan Services

Establishment or amendment of investment goals and objectives
Identify and understand the current liabilities
Develop an investment program that focuses on meeting current liabilities, improving the funded ratio, and reducing plan costs

Asset allocation studies and implementation
Asset allocation should be responsive to changes in the funded status of your plan
Both short-term and longer-term asset allocation should be driven by the liabilities and the need to meet benefit payments
Asset allocation decisions have the greatest impact on your fund’s return and success

Determination of cash flow and benefit payments
A custom liability index will be created and monitored
Asset allocation decisions will be driven by this analysis
The analysis will build from current and existing actuarial work

Manager searches
The first decision is active versus passive
No established buy list – each search starts anew
Clients’ input accepted

Performance measurement and reporting
Continuous evaluation of assets versus liabilities
Manager and asset class performance to be reviewed, but this is a secondary consideration
Short-term manager evaluations are not constructive to a longer-term investing philosophy

Monthly performance summaries
Useful for monitoring critical issues
Not focused on short-term performance, but rather relationship of assets to liabilities
Helpful to a responsive asset allocation framework

Risk assessment
Qualitative analysis
Quantitative analysis
Conducted at the plan, asset class and individual manager levels

Manager communication and monitoring
Annual on-site visits
Quarterly communication or more frequent, if issues arise
Summary reports provided to client highlighting any issues that need to be addressed
Extensive database to assist in monitoring the investment advisors

Customized projects
Eager to engage in value-added projects
Projects should be focused on improving performance, reducing costs, and / or streamlining administration

Educational Forums
Plan sponsor and trustee education to be provided
KCS or industry expert to be used
Inadequate education on investment subjects leads to incorrect investment decisions

Portfolio transitions
Transactions in the cash markets can be quite expensive
Transitions among managers to be conducted with care
Transition timeframes to be evaluated based on the composition of the managers’ portfolio and style

Fee negotiations
Performed as a project or part of a retainer relationship
Managers should be paid based on success

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