Pension Solutions

You Face Unique Challenges. PIMCO Can Help.

PIMCO’s continuous emphasis on innovating to develop solutions that help solve the challenges faced by pension plan sponsors which propelled us to aim to be a leading LDI manager over the last 20 years. We could not have maintained that standing for such a long time without a constant focus on innovation and a relentless pursuit of excellence.

Expertise

50+ years of experience working with defined benefit plans.

Analytics & Risk Management

Our Consultants provide insight and guidance through every aspect of pension risk management.

Proven Success

Our innovative strategies solidify our reputation as a leader in delivering tailored retirement outcomes.

Features of Our Pension Solutions

A Wealth of Resources and Expertise

PIMCO has a longstanding and deep commitment to our pension clients. As your partner, we bring our extensive global resources and decades of experience to work for you. We aim to be a leader and innovator in liability driven investing (LDI) and a pioneer in delivering complete and efficient de-risking solutions.

An Intensive Focus on Client Needs

PIMCO's pension solutions team partners with plan sponsors and their consultants to provide insight and guidance through every aspect of pension risk management program design and implementation.

Analyze

Each plan’s unique liability profile
Asset and liability risk factor composition
Sources of funded status volatility
Performance under various market conditions

Structure

Customized liability benchmarks
Tailored asset portfolios: return seeking/liability hedging
Completion management solutions
Overlay solutions
Optimized glide paths

Monitor

Funded status fluctuations
Performance of assets and liabilities
Impact of regulatory, legislative and accounting changes
LDI asset/liability hedge monitoring

Service

Ongoing collaboration to reassess plan needs
Dynamic adjustment over time of strategy and benchmark

The Client

A leading Information and Analytics firm aims to swiftly secure and maintain funding ratio gains, streamline the execution of asset allocation and hedge ratio adjustments, and simplify decision-making processes by reducing the number of involved parties, especially during critical financial strategy shifts.

Case Study

How did PIMCO address?

A dual-pronged LDI completion management program was established to address client goals, combining a holistic liability hedge strategy with a bundled physical and overlay structure in one account, and streamlining asset allocation via synthetic equity. This approach helps ensure close monitoring and quick adjustments of funding ratios and ALM risks, seeking to effectively mitigate risk and simplify operations.

The Results

The approach led to meaningful improvements: asset allocation shifts and hedge ratio adjustments were streamlined from two weeks to just one day, enabling quicker funding ratio gains lock-in. Over seven years, the plan's funding ratio increased meaningfully, and conflicts in fixed income management during glide path-triggered long credit security purchases were resolved.

Resources

Learn more about our capabilities to help you make informed decisions for your investments.

PIMCO Optimizer

Used in analyzing cash flows and understanding the key drivers of pension liability streams.

PIMCO Asset Liability Monitoring System (PALMS)

Helps monitor plan funding ratios and tracking liability hedge ratios.

PIMCO Risk Analytics & Hedging Application (PIRANHA)

Analyzes the combined risks of asset allocations and liabilities to determine funding ratio volatility or asset-liability tracking error.

More to Know

Access our latest portfolio insights and timely market commentary.

See More Insights

Research

LDI Programs: Finding a Better Replacement for Treasury STRIPS

1/21/2021

A holistic LDI portfolio may provide a superior liability hedge.

Rene Martel, Vijendra Nambiar

Research

LDI Portfolios: Keep Them Bundled

10/19/2017

When one considers opportunity costs, rebalancing and excess return potential, we believe a bundled approach is the optimal long-term solution.

Rene Martel

Research

When More Is Less: Dialing Up Active Management in LDI Portfolios May Reduce Risk

7/19/2017

Despite narratives claiming the contrary, a higher degree of active management within LDI portfolios may be the best path to lower funded status risk for DB plans.

Rene Martel

Investment Strategies

LDI Portfolios: Keep the Focus on Robust Liability-Hedging Assets

LDI portfolios that emphasize corporate credit may align best with liabilities. Large allocations to Treasuries and STRIPS are not a panacea for liability hedging.

Vijendra Nambiar, Aaron Smith

How Can PIMCO Help You?

For helpful resources, account assistance, and general contact, visit our Contact & Support Center. For more, access the additional links below.

Contact & Support

Disclosures

All investments contain risk and may lose value.

There is no guarantee that these investment strategies will work under all market conditions or are appropriate for all investors and each investor should evaluate their ability to invest long-term, especially during periods of downturn in the market.

A defined-benefit glide path is a de-risking strategy based on a function of plan funded status. As plan funded status improves, clients may be interested in reducing their plan funded status volatility by shifting out of risk assets and into liability-hedging fixed income.

PIMCO as a general matter provides services to qualified institutions, financial intermediaries and institutional investors. Individual investors should contact their own financial professional to determine the most appropriate investment options for their financial situation. This material contains the current opinions of the manager and such opinions are subject to change without notice. This material has been distributed for informational purposes only and should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. Information contained herein has been obtained from sources believed to be reliable, but not guaranteed. No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission. PIMCO is a trademark of Allianz Asset Management of America LLC. in the United States and throughout the world.

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