Whitepaper
Using LDI Completion Overlays to Reduce Pension Interest Rate Risk
September 30, 2020
While equities have rallied significantly since the lows of the 2008 financial crisis, funded status improvement has been offset by the lower yields used to discount pension liabilities. For corporate pensions considering liability-driven investing (LDI), the risk mitigation of a completion overlay is hard to ignore. It may be easy to dismiss LDI in the current environment given record-low Treasury yields. But plan sponsors should nonetheless consider making plans now so they’ll be ready to use these tools to reduce pension risk going forward.
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