Tag Archives: Investing

02.18.25
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Terrific Issue Brief from the American Academy of Actuaries

By: Russ Kamp, CEO, Ryan ALM, Inc.

An acquaintance of mine shared an issue brief that was produced by the American Academy of Actuaries last April. They Academy describe their organization and role, as follows. “The American Academy of Actuaries is a 20,000-member professional association whose mission is to serve the public and the U.S. actuarial profession. For more than 50 years, the Academy has assisted public policymakers on all levels by providing leadership, objective expertise, and actuarial advice on risk and financial security issues. The Academy also sets qualification, practice, and professionalism standards for actuaries in the United States.”

The brief addressed surplus management for public pension systems. What does it mean and what should be done when a plan is in “surplus”. It is important to understand that a surplus calculation (plan assets – plan liabilities) is a single point in time. Our capital markets (assets) and U.S. interest rates (discounting of liabilities) are constantly changing. A plan that is deemed to be in surplus today could easily fall below 100% the very next day.

The go go decade of the 1990s witnessed public pension’s producing fairly consistent double-digit returns. Instead of locking in these gains through sound surplus management, benefits were often enhanced, contributions trimmed, or both. As a result, once the decade of the ’00s hit and we suffered through two major recessions, the enhancements to the benefits which were contractually protected and the lowered contributions proved tough to reverse.

According to Milliman, they estimate the average public funded ratio at 81.2% (top 100 plans) as of November 30, 2024. This is up substantially from September 30, 2022 when the average funded ratio was roughly 69.8%. But it highlights how much work is still needed to be done. I agree that it is wise to have a surplus management plan should these critically important funds once again achieve a “surplus”. I would hope that the plan is centered on de-risking their traditional asset allocations by using more bonds in a cash flow matching (CFM) strategy to reduce the big swings in funding. Furthermore, it is critically important to secure what has already been promised than to weaken the funded status by enhancing benefits or cutting contributions prematurely.

I’d recommend to everyone involved in pension management that they spend a little time with this report. The demise of DB pension plans in the private sector has created a very uncertain retirement for many of our private sector workforce. Let’s not engage in practices that lead to the collapse of public sector DB plans.

02.13.25
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Nothing Here! Really?

By: Russ Kamp, CEO, Ryan ALM, Inc.

Yesterday’s financial news delivered an inflation surprise (0.5% vs. 0.3%), at least to me and the bond market, if not to the U.S. equity market. The Federal reserve had recently announced a likely pause in their rate reduction activity given their concerns about the lack of pace in the inflation march back to its 2% target. This came on the heels of “Street” expectations after the first 0.5% cut in the FFR that there were “likely” to be eight (8!) interest rate cuts by the summer of 2025. Oh, well, the two cuts that we’ve witnessed since that first move last September may be all we get for a while. “Ho hum” replied the U.S. stock market.

The discounting of yesterday’s inflation release is pretty astounding. Like you, I’ve read the financial press and the many emails that have addressed the CPI data 52 ways to Sunday. Much of the commentary proclaims this data point as a one-off event. For instance, the impact of egg price increases (13.8% last month alone) is temporary, as bird flu will be contained shortly. Seasonal factors impacting “sticky-priced” products tend to be announced in January. I guess those increases shouldn’t matter since they only impact the consumer in January. As a reminder, Core inflation (minus food and energy) rose from 3.1% to 3.3% last month. That seems fairly significant, but we are told that the other three core readings were down slightly, so no big deal. Again, really? Each of those core measures are >3% or more than 1% greater than the Fed’s target.

Then there are those that say, “what is significant about the Fed’s 2% inflation objective anyway”? It is an arbitrary target. Well, that may be the case, but for the millions of Americans that are marginally getting by, the difference between 2% and 3% inflation is fairly substantial, especially when we come up with all of these measures that exclude food, energy, housing (shelter), etc. Are you kidding?

As mentioned previously, expectations for a massive cut in interest rates due to the perception that inflation was well contained have shifted dramatically. Just look at the graph above (thanks, Bloomberg). Following the Fed’s first FFR cut of 50 bps, inflation expectations plummeted to below 1.5% for the two-year breakeven. Today those same expectations reveal a nearly 3.5% expectation. Rising inflation will certainly keep the Fed in check at this time.

As mentioned earlier in this post, U.S. equities shrugged off the news as if the impact of higher inflation and interest rates have no impact on publicly traded companies. Given current valuations for U.S. stocks, particularly large cap companies, any inflation shock should send a shiver down the spines of the investing community. Should interest rates rise, bonds will surely become a more exciting investment opportunity, especially for pension plans seeking a ROA in the high 6% area. How crazy are equity valuations? Look at the graph below.

The current CAPE reading has only been greater during the late 1990s and we know what happened as we entered 2000. The bursting of the Technology bubble wasn’t just painful for the Information Technology sector. All stocks took a beating. Should U.S. interest rates rise as a result of the current inflationary environment, there is a reasonable (if not good) chance that equities will get spanked. Why live with this uncertainty? It is time to get out of the game of forecasting economic activity. Why place a bet on the direction of rates? Why let your equity “winnings” run? As a reminder, managing a DB pension plan should be all about SECURING the promised benefits at a reasonable cost and with prudent risk. Is maintaining the status quo prudent?

02.06.25
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Interesting Insights From Ortec Finance

By: Russ Kamp, CEO, Ryan ALM, Inc.

PensionAge’s, Paige Perrin, has produced an article that referenced recent research from Ortec Finance. The research, which surveyed senior pension fund executives in the UK, US, the Netherlands, Canada, and the Nordics, found that 77% believe that risk will be elevated, either dramatically or slightly, in 2025. That’s quite the stat. It also follows on reporting from P&I that referenced heightened uncertainty by U.S. plan sponsors. As regular readers of this blog know, I’ve been suggesting to (pleading with) sponsors that they don’t need to live with uncertainty, which is truly uncomfortable.

Among several risks cited were interest rates, inflation, and market volatility. I can’t say that I blame them for their concerns. Who among us are able to adequately forecast rates and inflation? Seems like most fixed income professionals and bond market participants have been forecasting an aggressive move down in rates. Some of these prognosticators were forecasting as many as 7 rate reductions in 2024 and several others in 2025. We didn’t get 2024’s tally. Who knows about 2025 given that inflation has remained fairly sticky.

There is an easy fix for those of you who are concerned about interest rates and inflation. Adopt a cash flow matching (CFM) strategy that will carefully match asset cash flows of interest and principal with liability cash flows (benefits and expenses). Because benefit payments are future values (FVs), they are not interest rate sensitive. Problem solved! Furthermore, the use of CFM extends the investing horizon for the remainder of the fund’s growth assets, so they now have the appropriate time to grow to meet future liabilities.

One other startling stat caught my attention, as “77 per cent of senior pension fund executives believe the increasing number of retirees relative to the number of new hires in defined benefit (DB) plans pose a “significant” or “slight” risk to the DB pensions industry.” That concern is misplaced. I just wrote a post earlier this week on that subject. DB Pension plans are not Ponzi Schemes. They don’t need more depositors than those receiving payments. It is truly frightening that a significant percentage of our senior plan sponsors don’t understand how these plans are actuarial determined and subsequently funded.

Lastly, I nearly jumped out of my chair with excitement when I read the following quotes from Marnix Engels, Ortec Finance’s managing director for global pension risk, who stated the following:

“We believe assessing the risks of both (the bolding is my emphasis) assets and liabilities in combination is crucial to get the full picture on the health of a pension fund,” he said.

“If the impacts of risk drivers are only understood for one side of the funding health equation, then it is possible to misrepresent the overall effect.”

“If a fund is not assessing both assets and liabilities, then it is difficult to conclude the overall impact of interest rate hikes on the plan’s funding ratio.”

YES!!

02.04.25
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DB Pensions Are NOT Ponzi Schemes!

By: Russ Kamp, CEO, Ryan ALM, Inc.

I recently stumbled onto an article that was highlighting the impending pension crisis (disaster) that is unfolding in Florida. The author’s primary reason for concern is the fact that there are now more beneficiaries collecting (659,333) than workers paying in (459,428). Briefly mentioned was the fact that the pension system currently has a funded ratio of 83.7% up from 82.4% last year. The fact that there are more recipients than those paying into the system is irrelevant. DB pension systems are not Ponzi Schemes, which in nothing more than a fraudulent vehicle that relies on a continuous influx of new “investors” (substitute plan participants) to pay the existing members of the pool.

A DB pension’s promises (benefit payments) are calculated by actuaries who have an incredibly challenging job of forecasting each individual’s career path (tenure), salary growth, longevity, etc. They do a great job, but they’ll be the first to tell you that they don’t get the individual participant calculations correct, but they do an amazing job of getting the total universe of payments nearly spot on. An acquaintance of mine, who happens to be an excellent actuary shared the following, “pension plans are funded over an active member’s career so that there will be sufficient funds to pay retirement benefits for life.  The funding rules in Florida require contributions to get the plan 100% funded over time.”

Granted, there are states that have not made the annual required contribution, in some cases for decades, and those plans are suffering (poorly funded) as a result. That isn’t the actuary’s issue, but they are left to try to make up the difference by forecasting the need for greater contributions and more significant returns. The payment of contributions comes with little uncertainty, while the reliance on greater investment performance comes with a huge amount of uncertainty over short time frames. I wouldn’t want my pension fund or livelihood (Executive Director, CIO, etc.) dependent on the capital markets.

I frequently hear the concern expressed about negative cash flow plans (i.e. contributions do not fully fund benefits). Why? If pension systems are truly designed based on each participant’s forecasted benefit, mature plans are bound to eventually fall into negative cash flow situations. These plans are designed to pay the last plan participant the last $1 of assets. These pension systems aren’t designed to be an inheritance for some small collection of beneficiaries who make it to the finish line. Importantly, there should be different investment strategies used for plans that are collecting more than they are paying out versus those in negative cash flow situation.

DB pensions are critically important retirement vehicles that need to be protected and preserved. Fabricating a crisis based on an incorrect observation is not helpful. If plan sponsors contribute the necessary amount each year and manage the assets prudently, these pension systems should be perpetual. Neglect the basics and all bets are off!

01.29.25
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What A Challenging Job!

By: Russ Kamp, CEO, Ryan ALM, Inc.

I’m going to divert from my normal focus on cash flow matching (CFM) and the defeasing of pension liabilities to write about a subject that I love and one that doesn’t get nearly the air time that it should. I was reminded of this topic at the FPPTA’s latest TLC program in Orlando, which I’ve thoroughly enjoyed participating. If you aren’t aware of the TLC (Thought Leadership Council) this is the FPPTA’s newest advanced educational program for experienced pension trustees. The program is limited to 20-25 trustees who get to roll up their sleeves with highly experienced coaches/mentors. I’m grateful to be included.

On Monday, one of the discussions centered on active managers, particularly US domestic equity managers, who have an incredibly challenging job trying to outperform their respective benchmarks, especially given the concentrated nature of the U.S. equity stock market during the last couple of years. Asset consultants have an even more challenging job trying to figure out which of those active asset managers will actually provide alpha NET of fees. As mentioned during one particular session, there are many aspects of the investment management process that are evaluated by consultants in an attempt to try and identify those few outperformers. These screening criteria may include the depth and consistency of staff, overall experience in managing the strategy, AUM in the product, and of course, performance. However, just because a manager outperformed (provided an excess return vis-a-vis the benchmark) an index at one point doesn’t mean it will happen again. Was the outperformance the result of skill or luck or a little of both?

As I explained to the TLC participants, stock selection factors (indicators or ideas) used to “pick” stocks to be included in the manager’s portfolio have an information content that can be measured. The “value-added” from an idea/factor can ebb and flow depending on a number of factors. Is the “deterioration” in the information coefficient (IC) an indication that the factor is losing it’s forecasting ability or is it just currently out of favor? As investment management firms get larger, the AUM that they control can overwhelm those insights diminishing the forecasting ability of that idea. Other investment management firms have bright people looking for an edge, too. They might just capture the same or similar insights rendering everyone’s use of that idea less robust, which I witnessed first hand in 2007’s quant manager meltdown. Below are two posts that touch on this topic. I hope that my ideas prove useful to you. 

Change Is Good – Really!

and,

If it is That Good, Why Disclose it?

In a previous life, I was the CEO of Invesco’s quant business, which featured roughly 50 incredibly bright team members located both here and abroad and we managed about $30 billion in AUM. During our time together, we developed roughly 55 different strategies (optimizations), mostly U.S. equity mandates for which we had specific return/risk characteristics such as our Structured Core Equity product that was designed to achieve a 2% return for a 3% tracking error or a 0.67 information ratio versus the S&P 500.

We also thought that it was critically important to determine what we believed was the natural capacity of each strategy, as we didn’t want to arbitrage away our own insights. For instance, our Small Value product’s capacity was <$500 million, while many of the larger cap offerings had abundant capacity equal to billions of $s. Trustees should ask their managers what they believe is the natural capacity of the strategy(ies) that they are invested in and how they determined it.

Lastly, I would ask each manager to discuss a stock selection idea (factor / indicator) that they once used, but no longer do and why. Furthermore, I’d ask them to discuss an idea that they are now using to help them choose their portfolio constituents that they might not have been using 3-5 years ago. I’d make sure to understand how often they review every aspect of their investment management process. If that isn’t a normal part of their process, I’d be very concerned. For standing pat means that you are likely falling behind. It will be interesting to hear the replies.

Given how challenging it is to identify value-added managers as a consultant or consistently add value as an investment manager, I’m glad that Ryan ALM focuses on defeasing pension liability cash flows of benefits and expenses with asset cash flows from bonds (principal and interest). There is little uncertainty in our process. It is truly a sleep well at night strategy for all involved.

01.23.25
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That Step Isn’t Necessary!

By: Russ Kamp, CEO, Ryan ALM, Inc

I recently stumbled over a brief article that touched on LDI. I’m always interested in absorbing everything that I can on this subject. I was particularly thrilled when the author stated, “since LDI was recognized as best practice for defined benefit (DB) plans…” – YES! I’m not sure where that proclamation came from, but I agree with the sentiments. The balance of that sentence read, “…sponsors have implemented investment strategies as a journey.”

The initial steps on this journey were for plan sponsors to “simply extend the duration of their fixed income using longer duration market-based benchmarks.” Clearly, the author is referencing duration matching strategies as the LDI product of choice during that phase. According to the author, the next phase in this LDI journey was the use of both credit and Treasuries to better align the portfolio with a plan’s liability risk profile.

Well, we are supposedly entering a third phase in this LDI journey given the improved funded status and “outsized” allocations to fixed income. The question they posed: “How do we diversify the growing fixed income allocation?” Their answer, add a host of non-traditional LDI fixed income products, including private debt and securitized products, to the toolkit to add further yield and return. No, no, and no!

As mentioned previously, funded status/ratios have improved dramatically. According to this report, corporate plans have a funded ratio of 111% at the end of 2024 based on their firm’s Pension Solutions Monitor. Given that level of funding, the only thing that these plans should be doing is engaging a cash flow matching (CFM) strategy to SECURE all the promises that have been given to the plan participants. You’ve WON the pension game. Congratulations! There is no reason for a third phase in the LDI journey. There likely wasn’t a need for the second phase, but that’s water over the dam.

We, at Ryan ALM, believe that CFM is a superior offering within the array of LDI strategies, as it not only provides the necessary liquidity to meet monthly liability cash flows, but it duration matches each and every month of an assignment. Ask us to CFM the next 10 years, we will have 120 duration matches. Most duration matching strategies use either an average duration or a few key rates along the yield curve. Since duration is price sensitive, it changes constantly.  In addition, yield curves do not move in parallel shifts making the management of duration a difficult target.

With CFM you can use STRIPS, Treasuries, investment grade corporates or a combination of these highly liquid assets. You don’t need to introduce less liquid and more complex products. A CFM strategy is all you need to accomplish the pension objective. A CFM strategy provides certainty of the cash flows which is a critical and necessary feature to fully fund liabilities. This feature does not exist in private debt and securitized products. As a reminder, the pension objective is not a return target. It is the securing of the promised benefits at a reasonable cost and with prudent risk. Don’t risk what you’ve achieved. Lock in your funded status and secure the benefits. This strategy is designed as a “sleep well at night” offering. I think that you deserve to sleep like a baby!

01.14.25
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Hey, Pension Community – We Have Liftoff!

By: Russ Kamp, CEO, Ryan ALM, Inc.

Not since October of 2023 have we seen long-dated Treasury yields at these levels. Currently, the 30-year Treasury bond yield is 5% (12:47 pm EST) and the 10-year Treasury Note’s yield has eclipsed 4.8%. Despite tight credit spreads, long-dated (25+ years) IG corporate bond yields are above 6% today (chart in the lower right corner).

Securing pension liabilities, whether your DB plan is private, public, or a multiemployer plan, should be the primary objective. All the better if that securing (defeasement strategy) can be accomplished at a reasonable cost and with prudent risk. The good news: the current rate environment is providing plan sponsors with a wonderful opportunity to accomplish all of those goals, whether you engage in a cash flow matching (CFM) for a relatively short period (5-years), intermediate, (10ish-years) or longer-term (15- or more years) your portfolio of IG corporate bonds will produce a YTM of > 5.5%. This represents a significant percentage of the target ROA.

Furthermore, as we’ve explained, pension liabilities are future values (FVs), and FVs are not interest rate sensitive. Your portfolio will lock in the cost savings on day one, and barring any defaults (about 2/1,000 in IG bonds), the YTM is what your portfolio will earn throughout the relationship. That is exciting given the fact that traditional fixed income core mandates bleed performance during rising rate regimes. In fact, the IG index is already off 1.2% YTD (<10 trading days).

Who knows when the high equity valuations will finally lead to a repricing. Furthermore, who knows if US inflation will continue to be sticky, the Fed will raise or lower rates, geopolitical risks will escalate, and on and on. With CFM one doesn’t need a crystal ball. You can SECURE the promised benefits for a portion of your portfolio and in the process you’d be stabilizing the funded status and contribution expenses associated with those assets. Don’t let this incredibly attractive rate environment come and go without doing anything. We saw inertia keep plans from issuing POBs when rates were historically low. It is time to act.

01.08.25
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Corporate Funding Improved Significantly in 2024!

By: Russ Kamp, CEO, Ryan ALM, Inc.

Milliman is out with the year-end report on corporate pension funding and it tells a beautiful story. The Milliman 100 Pension Funding Index (PFI), is reporting an average 105% funded ratio at the end of 2024 compared to 99.5% at the end of 2023. But wait, assets for the top 100 plans only grew by 4.2%, which must have been below the stated ROA. Furthermore, total assets declined by $26 billion after accounting for benefits and expenses. How is that possible? Oh, I get it, the growth in liabilities matters.

Milliman is reporting that the discount rate used to value corporate pension liabilities increased 59 bps during the year from 5.0% at 12/31/23 to 5.59% as of year-end 2024. That significant move up in rates drove the present value of those pesky liabilities down by -$94 billion creating a $68 billion improvement in the asset/liability relationship and a significantly improved funded ratio! Congrats corporate America and the participants that you serve!

I was recently asked by an industry reporter if the “underperformance” of corporate plans versus other sponsoring groups – public and multiemployer – should be a concern. I, of course said NO, that managing a DB plan is all about the relationship of assets to liabilities. Both could have negative or positive growth rates, but if asset growth exceeds liability growth the plan wins! It is really a simple concept.

Now, I would suggest that corporate America get even more conservative at this time, as we live in an environment of stretched valuations, stubborn inflation, the prospect of higher rates, etc. Congrats on your collective victory. Secure those promises through a cash flow matching (CFM) strategy that will not only provide you with the security that the benefits are protected, but the enhanced liquidity and lengthened investing horizon for any residual growth assets will also be realized.

As always, thanks to Zorast Wadia and the Milliman organization for taking the time to produce this important analysis. Without good data, it is difficult to know how to play the game – assets versus liabilities is the name of the pension game!

01.07.25
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Will You Do Nothing?

By: Russ Kamp, CEO, Ryan ALM, Inc.

I recently read an article by Cliff Asness of AQR fame, titled “2035: An Allocator Looks Back over the Last 10 Years”. It was written from the perspective that performance for world markets was poor and his “fund’s” performance abysmal during that 10-year timeframe. His take-away: we can always learn from our mistakes, but do we? He cited some examples of where he and his team might have made “mistakes”, including:

Public equity – “It turns out that investing in U.S. equities at a CAPE in the high 30s yet again turned out to be a disappointing exercise”.

Bonds – “Inflation proved inertial” running at 3-4% for the decade producing lower real returns relative to the long-term averages.

International equities – “After being left for dead by so many U.S. investors, the global stock market did better with non-U.S. stocks actually outperforming”.

Private equity – “It turned out that levered equities are still equities even if you only occasionally tell your investors their prices”. When everyone is engaged in pursuing the same kind of investment there is a cost.

Private credit – “The final blow was when it turned out that private credit, the new darling of 2025, was just akin to really high fee public credit” Have we learned nothing from our prior CDO debacle?

Crypto – “We had thought it quite silly that just leaving computers running for a really long time created something of value”. “But when Bitcoin hit $100k we realized that we missed out on the next BIG THING” (my emphasis) “Today, 10 after our first allocation and 9 years after we doubled up, Bitcoin is at about $10,000.”

Asness also commented on active management, liquid alts, and hedge funds. His conclusion was that “the only upside of tough times is we can learn from them. Here is to a better 2035-2045”

Fortunately, you reside in the year 2025, a year in which U.S. equities are incredibly expensive, U.S. inflation may not be tamed, U.S. bonds will likely underperform as interest rates rise, the incredible push into both private equity and credit will overwhelm future returns, and let’s not discuss cryptos, which I still don’t get. Question: Are you going to maintain the status quo, or will you act to reduce these risks NOW before you are writing your own 10 year look back on a devastating market environment that has set your fund back decades?

As we preach at Ryan ALM, Inc., the primary objective when managing a DB pension plan is to SECURE the promised benefits at a reasonable cost and with prudent risk. Continuing to invest today in many segments of our capital markets don’t meet the standard of low cost or of a prudent nature. Now is the time to act! It really doesn’t necessitate being a rocket scientist. Valuations matter, liquidity is critical, high costs erode returns, and no market outperforms always! Take risk off the table, buy time for the growth assets to wade through the next 10-years of choppy markets, and SECURE the promised benefits through a cash flow matching (CFM) strategy that ensures (barring defaults) that the promised benefits will be paid when due.

Thanks, Cliff, for an excellent article!

12.23.24
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Is Now The Time To Act?

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

Equity market participants were recently reminded of the fact that markets can fall, and unfortunately they usually don’t decline with any kind of notice. The impetus behind the markets’ most recent challenging day was the Fed’s relatively tame forecast for likely interest rate moves in 2025. There is no question in my mind that the nearly 4-decade decline in rates from lofty heights achieved in the early ’80s, when the Fed Funds Rate eclipsed 20%, to the covid-fueled bottom reached in early 2020, when the yield on the 10-year Treasury Note was at 0.5%, made bond returns a lot stronger than anyone’s forecast.

It certainly seemed that the US Federal Reserve provided the security blanket any time there was a wobble in the markets. This action allowed “investors” to keep their collective foot on the gas with little fear. Sure, there were major corrections during that lengthy period, but the Fed was always there to lend a hand and a ton of stimulus that propped up the economy and markets, and ultimately the investment community. As we saw in 2022, the Fed had run out of dry powder and ultimately had to raise US interest rates to stem a vicious inflationary spike. Rates rose rather dramatically, and the result was an equity market, as measured by the S&P 500, that declined 18% for the calendar year. Bonds faired only marginally better as rising rates impacted bond principals creating a collective -12.1% return for the BB Aggregate Index.

As we enter 2025, do we once again have a situation in which the Fed’s ability to reduce rates has been curtailed due to a stronger economy than anticipated? Will the continued strength and massive government stimulus drive inflation and rates higher? According to a blog post from Apollo’c CIO, here are his list of the potential risks and the probabilities:

Risks to global markets in 2025

Interesting that he feels, like we do at Ryan ALM, Inc., that the economy is likely to be stronger than most suspect (#6) leading to higher inflation, rising rates (#7), and a 10-year Treasury Note yield in excess of 5% (#8). That yield is currently at 4.6% (as of 3:06 pm).

For those that might be skeptical, the Atlanta Fed’s GDPNow model is currently forecasting GDP growth for Q4’24 at 3.1% annualized. They have done a wonderful job forecasting quarterly growth rates. Their forecasts have consistently been above the “street’s” and as a result, much more accurate.

In addition, despite the third rate cut by the Federal Reserve at the most recent FOMC meeting of their benchmark Fed Funds Rate (-1.0% since the easing began), interest rates on longer dated maturities have risen quite significantly, as reflected below.

Rising US rates, stronger growth, and greater inflation may just be the formula for a significant contraction in equity valuations, especially given the current level. Be proactive. Reduce risk. Secure the promised benefits. Under no circumstance should you just let your “winnings” ride.