Liability-responsive asset allocation A dynamic approach to pension plan management
It's no secret pension plans have faced changes lately.
Many have been hit hard by market volatility. The Pension Protection Act of 2006 has changed the way plan sponsors look at pension plans. They aren't just looking at their assets—they're looking at their current and future liabilities, too. This shift in perception drove us to develop a new approach we call liability-responsive asset allocation (LRAA).
Liability-responsive asset allocation allows a plan to adopt an appropriate level of equity investment at a particular funded status, while also allowing for automatic adjustment of that strategy if funded status changes materially. This approach is designed for pension plans. Specifically, it may be more attractive to frozen plans or those with low rates of new benefit accruals.
Download our liability-responsive asset allocation paper, where we:
Describe how a plan might implement an LRAA strategy
Provide examples of an LRAA schedule
Outline 8 practical considerations that arise under an LRAA approach
Nothing contained in this material is intended to constitute legal, tax, securities, or investment advice, nor an opinion regarding the appropriateness of any investment, nor a solicitation of any type. The general information contained in this publication should not be acted upon without obtaining specific legal, tax, and investment advice from a licensed professional.
This material is not an offer, solicitation or recommendation to purchase any security.
Russell Investment Group is a Washington, USA corporation, which operates through subsidiaries worldwide, including Russell Investments, and is a subsidiary of The Northwestern Mutual Life Insurance Company.
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Download our liability-responsive asset allocation paper, where we:
