Risk Management
We partner with our clients to develop a customized investment strategy based on their objectives and risk tolerance.
- Portfolio returns
- Surplus volatility
- Contributions
- Pension expense
- Standard deviation of portfolio or surplus
- Volatility of funded status, contributions, or pension expense
- Asset/liability analysis
- Liability hedging analysis
- Asset allocation
- Liability-driven investing
- Dashboard reporting
- Custom liability benchmarks
- Periodic asset/liability reports
The volatility of a plan's funded status can be attributable to several economic factors. We will work with you to determine the appropriate exposure to each factor based on your objectives.
BNY Mellon uses three ratios to assist in the development, implementation, and monitoring of Liability Driven Investing (LDI) strategies. Illustrated to the right are sample hedge ratios for three LDI strategies. A 100% hedge indicates assets are expected to track liabilities when there are changes in interest rates, credit spreads, or non-parallel yield curve shifts.
Integrated Solution is supported by customized reports. Our "dashboard" and asset/liability reports contain current asset and liability information.
BNY Mellon uses proprietary models to provide deterministic and probabilistic forecasts of funded status, contribution requirements, surplus/deficit, and pension expense. These tools allow sponsors to analyze the pros and cons of various investment strategies.
