August 22, 2012
--- ING U.S.
Investment Management introduced a customizable liability-driven investing
(LDI) collective trust solution to assist plan sponsors with matching assets to
future benefit payments. ---
The collective trust’s long, corporate bond exposure can
more closely match pension liabilities than generic, long-duration strategies
that typically combine corporate and government bonds or use only the
LDI has become an important consideration for pension plans
in recent years, particularly because of new regulations requiring plans to
more specifically manage their assets toward the goal of paying future
benefits. ING said the challenge has been that many LDI solutions are either
institutional separate accounts requiring high asset balances or non-customized
solutions consisting of a mix of government and corporate credits that do an
imperfect job of matching assets to liabilities.
According to Frank Van Etten, deputy head of Multi-Asset
Strategies and Solutions (MASS) at ING Investment Management, the new LDI
collective trust is innovative in its ability to closely align a pension plan’s
assets and liabilities to help ensure that liability volatility can be managed
within an expected deviation. The strategy is managed by ING Investment
Management’s MASS and Fixed Income teams, including in-house actuarial staff
that works to balance the asset-liability mismatch, portfolio yield and
concentration risk in a plan’s investment policy.
More information is available here.