'Daunting' investment expertise and resources required
Only one-fifth of pension plans in Canada, the Netherlands, the United Kingdom and the United States are currently implementing liability driven investing (LDI) strategies, according to a global quick poll sponsored by SEI, provider of outsourced asset management, investment processing and investment operations solutions.
In Canada, 21 per cent of respondents are currently using an LDI approach and only seven per cent said they will be this year.
The poll of 226 executives overseeing pensions with assets ranging from $30 million US to more than $5 billion US also finds 33 per cent are not considering implementing an LDI approach. However, nearly three-quarters (72 per cent) of those polled indicate they want the asset pool to provide some level of support to their pension’s liability.
“Plan sponsors want the benefits of an investment strategy that is focused on supporting the pension’s liabilities and the lack of implementation raises the question as to whether or not they are receiving adequate advice and direction,” says Andrew Kitchen, managing director of strategies and solutions at SEI. “In Canada, the level of investment expertise and resources required for LDI implementation is daunting, particularly when combined with a high level of plan design changes and the new funding and accounting rules.”
In Canada, 21 per cent of respondents are currently using an LDI approach and only seven per cent said they will be this year.
The poll of 226 executives overseeing pensions with assets ranging from $30 million US to more than $5 billion US also finds 33 per cent are not considering implementing an LDI approach. However, nearly three-quarters (72 per cent) of those polled indicate they want the asset pool to provide some level of support to their pension’s liability.
“Plan sponsors want the benefits of an investment strategy that is focused on supporting the pension’s liabilities and the lack of implementation raises the question as to whether or not they are receiving adequate advice and direction,” says Andrew Kitchen, managing director of strategies and solutions at SEI. “In Canada, the level of investment expertise and resources required for LDI implementation is daunting, particularly when combined with a high level of plan design changes and the new funding and accounting rules.”
