AVOIDING THE POTHOLES OF LDI

摘要

The Picture isn't pretty. The aver age U.S. corporate pension fund is under funded: The solvency ratio of a typical large plan plummeted below 80 per cent in the second half of 2011. Why, then, are defined benefit pension funds implementing liability-driven investment (LDI) strategies in record numbers, potentially locking in these deficits at today's very low interest rate levels? The problem is exacerbated by accounting rules that invite even well-funded plans to take on greater economic risk.