How Higher Interest Rates Are Changing Focus of Fully Funded Pension Funds

Fully funded due to higher discount rates and investment performance, many corporate defined benefit pension funds are shifting their investment goals to maintaining that funding progress, from their prior focus of maximizing investment returns. While many have had significant assets dedicated to liability-driven investing in recent years, they are finding it is time to acknowledge the higher-yield, better-funding environment. As a result, a common approach among the cohort is to examine “overlap in plan holdings, inadequate hedging of liabilities and...