RT Journal Article SR Electronic T1 A Goal-Focused Approach to Full Funding: Making Pension
Plans More Adaptive to Change JF The Journal of Retirement FD Institutional Investor Journals SP 79 OP 90 DO 10.3905/jor.2013.1.2.079 VO 1 IS 2 A1 Andy Hunt A1 Stuart Jarvis YR 2013 UL https://pm-research.com/content/1/2/79.abstract AB The authors outline current best practices in designing and implementing a pension plan’s optimal investment policy toward a clearly defined funding goal given the plans’ liabilities. Two key factors point to a dynamic approach: Changes in the plan’s funding ratio and changes in the investment opportunity set. The authors demonstrate how the range of potential outcomes for the pension plan is improved when its investment policy becomes goal-focused and adaptive to changing circumstances, and refer to this approach as “Journey Management.” The authors propose not a single one-size-fits-all strategy, but a framework that can be tailored to a plan’s unique situation. They speculate that improved governance will likely be required to effectively implement such an approach.TOPICS: Pension funds, risk management, volatility measures