Pension Plan De-Risking: Is LDI the Only Option? (KKR-Prisma)

June 2014

KEYWORDS: alternative investment, hedge funds, risk management, portfolio diversification

Authors:

Stanley Kogelman, Girish Reddy, Thomas Healey, Eric Wolfe

Organizations:
  • KKR Prisma

Summary:
In 2013, strong equity performance in combination with rising rates substantially improved the funded status of most corporate defined benefit plans. With funding ratios rising above 90%, or even topping 100%, sponsors of ongoing plans may want to expand or implement “de-risking” strategies that protect their funded status. In this paper, we address alternative de-risking strategies that are likely to be effective if rates trend upward over the next three to five years.

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