Evaluation Associates has advised defined benefit plans for more than 30 years and today we serve more than 50 corporate defined benefit plans ranging in size from $50 million to multibillion.

A continuum of defined benefit plan solutions

We have long been active in the arena of defined benefit plans, where our focus began with assisting clients as they shifted assets from insurance companies and bank trust departments. From there, our expertise grew to include moving portfolios to higher equity exposures in the 1970s, dedicated bond portfolios in the early 1980s, international equities in the late 1980s, core/satellite portfolios in the early 1990s, private equity in the late 1990s, and absolute return and inflation-related strategies in early 2000. Today our consultants also help clients shape effective strategies for liability-driven investing and risk budgeting.

Highlights

Our work for clients that have defined benefit plans includes:

• performing asset/liability modeling with risk budgeting to mitigate financial risks, maximize surplus returns, and maximize financial efficiency
• developing liability benchmarks
• building high-quality bond portfolios to match the stream of benefit payments and enabling more aggressive management of the remaining portfolio
• loosening style-constrained mandates in favor of eclectic, opportunistic, all cap, and global mandates
• developing and monitoring investment programs for frozen plans and those being terminated through final settlement
• analyzing the effect of company stock holdings on volatility, funding, and peer comparisons
• educating client committees and staff on emerging investment strategies, including hedge funds, private equity, infrastructure, opportunistic and inflation-related investments, and the range of alpha opportunities, from concentrated portfolios to 130/30 and portable alpha strategies
• evaluating, recommending, and monitoring ancillary services, such as master trustee/custodian services and fees, performance measurement services, securities lending, directed brokerage, and transition management
• making recommendations for rebalancing

Meeting today’s challenges

Corporate plans face accelerated funding pressures introduced by the Pension Protection Act of 2006, along with new accounting rules from the Financial Accounting Standards Board. Public plans confront similar liability discount rules from GASB, as well as the impetus to fund post-retiree medical payments. We work with both plan types to manage these issues with strategic liability-driven investing and risk budgeting that help maintain financial strength and viability.