Our Obligation Is To Help Pension Plans Meet Theirs
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.
How Can PIMCO Help You?
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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