Liability Driven Investing (LDI)
Shields recognizes that the ultimate goal of a pension plan is to fund the plan’s liabilities. Until recently many plan sponsors focused only on the asset side of equation and the relationships of the individual assets to each other. However, recent changes in pension laws make moving toward an LDI solution, and incorporating liabilities into the asset allocation, more attractive for the majority of plans.
Shields helps clients understand the potential risks and rewards of moving from a traditional asset-based framework toward a Liability Driven Investment strategy. LDI solutions require careful cost/benefit analysis and constant monitoring of
- Interest rate risk
- Liability duration
- Funding levels
- Volatility of plan funding costs
Having worked with a wide range of clients, from some of the most sophisticated investment banks to corporate industrial plans, Shields Associates possesses exceptional insight into evaluating pension plan cost structures and determining the appropriate use of LDI frameworks. Our experience and knowledge surpass the conventional intelligence available to most plan sponsors.
