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GSAM Q&A Discusses Tax Reform Effect on Pensions

The document is titled, Does a Borrow-to-Fund and De-Risk Strategy Still Make Sense?

By Rebecca Moore editors@assetinternational.com | March 14, 2017

Goldman Sachs Asset Management (GSAM) has issued a Q&A document about the effects on defined benefit plans of the U.S. corporate tax reforms, written by Mike Moran, Chief Pensions Strategist at GSAM.

Titled, Does a Borrow-to-Fund and De-Risk Strategy Still Make Sense?, the document answers questions such as:

  • Interest rates may be rising. Corporate tax rates may be falling. Foreign-held cash may be more accessible. Does it still make sense for corporate DB plan sponsors to consider a borrow-to-fund and de-risk strategy?
  • Long-term interest rates have risen about 100 bps since summer 2016. If interest rates are expected to continue to rise, should a plan sponsor just wait for that to occur, which would help to cure deficits?
The full Q&A may be found on GSAM’s website.