Best Pensions Paper 2019 (North America)

Wellington Management wins "Best Pensions Paper 2019 (North America)"

Some of the world's largest pension plans are based in North America. The majority of U.S. corporations have shifted from defined benefit to defined contribution plans, but those still managing DB plans face a unique set of challenges, mostly centered around risk management. In their winning paper, Wellington Management looks at pension accounting assumptions (such as ROA) and derisking activities, asking what effect these choices may have on corporate equity valuations. 

WINNER: WELLINGTON MANAGEMENT

U.S. DB dilemma: How do investment decisions affect stock returns? (Wellington Management)

Corporate defined benefit pension plans in the United States often adopt a liability-driven investment (LDI) framework in order to derisk and stabilize their corporate balance sheet. In this paper, Wellington Management looks at the derisking process and the effect it can have upon a company's stock. Accounting assumptions, pension buyouts, and other aspects of the derisking process should be carefully managed, especially due to their implications for equity valuation.

HIGHLY COMMENDED

2019 Defined Contribution Trends Survey (Callan Institute)

For compliance reasons, this paper is only accessible in the United States

Callan's survey of defined contribution trends was conducted in late 2018. The report incorporates survey response data from over 100 plan sponsors. As a 55-page chartbook with commentary alongside, the report highlights ongoing industry-wide themes and projections for the year ahead.

Secure Retirement: Connecting Financial Theory & Human Behavior (CFA Institute Research Foundation)

How do irrational decisions, fear, and uncertainty affect investors' retirement portfolios? What can be done to combat the very human tendency to buy high and sell low? These are just two of the complex issues that arise during the retirement planning process. CFA Charterholder Jacques Lussier uses Monte Carlo simulations to analyze outcomes from a statistical perspective and to provide a set of potential solutions for propelling investors towards a secure retirement.

The world's largest 300 pension funds (Thinking Ahead Institute)

The Thinking Ahead Institute offers an analysis of the world's 300 largest pension funds. Assets under management at these funds fell slightly (0.4%) in 2018, with assets totalling USD 18 trillion as of year-end. North American pension funds accounted for over 45% of the pension assets included in this report. Assets in this region also grew faster than any other region during the previous five years.

U.S. Corporate Pension De-Risking: More Than Just Bonds (GSAM)

For compliance reasons, this paper is only accessible in the United States

De-risking activities can include amending features of defined benefit plans, offering lump sum payments or annuities to participants in order to reduce future liabilities, increasing allocations to fixed income, or other strategies focused upon risk reduction. This paper predominantly covers the latter method of de-risking, with particular emphasis on options strategies such as a Put Spread Collar overlay.

Global Pension Assets Study 2019 (Thinking Ahead Institute)

A distinctive annual update on the pension landscape, this study of global pension assets provides data from 22 of the largest global pension markets. These markets combine to total over USD 40 trillion in pension assets. The report also looks at seven of the 22 markets in further detail, including the United States and Canada.

How America Saves 2019 (Vanguard)

Through this report, Vanguard provides insight about retirement savings habits in the United States. The report draws from recordkeeping data for over 5 million participants in defined contribution retirement plans. It includes information on automatic enrollment, the adoption of target-date funds, matching contributions, and other data on the accumulation and management of U.S. retirement savings.

 

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Savvy Awards 2019 Magazine

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