STOP OR GO?

It was only a couple of years ago that pension plan sponsors were trying to manage less-than-ideal funding levels against global economic issues such as the European debt crisis. It was a difficult time, with investment experts telling everyone to get used to the extreme market volatility and to de-...

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Veröffentlicht in:Benefits Canada 2014-06, Vol.38 (7), p.61
1. Verfasser: Palermo, Tony
Format: Artikel
Sprache:eng
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Zusammenfassung:It was only a couple of years ago that pension plan sponsors were trying to manage less-than-ideal funding levels against global economic issues such as the European debt crisis. It was a difficult time, with investment experts telling everyone to get used to the extreme market volatility and to de-risk their plans by diversifying and implementing low-volatility options. Skip ahead to Apr 1, 2014, when the Ontario Teachers' Pension Plan (Teachers') announced its first surplus in 10 years, with a funding level of 103% and net assets reaching a record $140.8 billion. According to Teachers', the plan has 2,900 pensioners age 90 or older, of which 126 are 100 years old or older. Low-vol strategies also make sense for DC plans. In his 2014 paper titled "Low Volatility Equity Strategies -- The Holy Grail for DC Investors," Neil Lloyd, a partner with Mercer, argues that recent research has shown that the volatility of shares and their return characteristics are not proportionately linked.
ISSN:0703-7732