Human Resources

Core Services

Asset Allocation & Asset Liability

Organizations with defined benefit plans today find themselves under heightened pressures and facing many challenges. Risk management is a key consideration. As a result, plan sponsors are becoming progressively more concerned with their pension investment strategies.

In Aon Hewitt Investment Consulting’s approach to pension asset-liability studies, the actuary, investment consultant, and plan sponsor collaborate to identify plan goals and objectives, being mindful of both the assets and liabilities. The ultimate goal of asset-liability analysis is to determine the optimal pension plan management strategy, including management of the investment policy, funding strategy, plan design, and actuarial assumptions and methods.

Recent pension funding and accounting reforms compel plan sponsors to place additional emphasis on better matching pension assets and liabilities in order to control annual cost and funded status volatility. The focus has shifted from traditional cost management approaches to broader risk management. Aon Hewitt Investment Consulting’s asset-liability experts can help clients manage the risks that arise due to the mismatches between the assets and liabilities of a pension plan.