Three Key Issues Impacting Multiemployer Pension Trustees

Never before have trustees overseeing multiemployer pension funds been challenged as much as they are today. New investment strategies, new regulations and volatile markets have made being a fund trustee extremely trying. At a time when accountability has never been more at the forefront, what kind of decisions are trustees making? Where are they getting help? What do they feel needs to change? The Pension Management Research Panel recently conducted research aimed at answering these questions.

Three Key Issues Impacting Multiemployer Pension Trustees (PDF)

Multiemployer Pension Plans Can Grow Assets While Limiting Risk Through Increased Diversification

Multiemployer plan trustees have long weighed the pros and cons of the traditional conservative nature required to protect plan assets with the growth possibilities increased diversification can bring. Multiemployer plans have historically lagged when it comes to increasing diversification into some of the newer and more complex asset classes. The reasons for this vary but often trustees are under the misconception that non-traditional asset classes carry more risk and feel it is their fiduciary responsibility to keep the plan's assets in what they consider to be "safer" investments. This not only is a misconception, but in fact in certain cases the opposite is true - multiemployer plans can effectively manage risk by increasing diversification.

Limiting Risk Through Increased Diversification (PDF)

Why are Taft-Hartley Plans Turning to SEI's Manager of Managers Program?

Unions have traditionally relied on a combination of in-house capabilities and professional expertise to manage pension assets. Most often, these outside experts include actuaries, consultants and investment managers. In this framework, the consultant may act as a facilitator for key decisions such as the setting of asset allocation policy, the analysis to hire investment managers and the ongoing reporting of performance relative to stated benchmarks. In the end, however, the plan trustees are left with the bulk of the responsibility for day-to-day decision making and execution: actually hiring and firing managers, re-allocating assets to the strategic asset allocation, documenting policies and ensuring compliance, and evaluating future investment opportunities, to name a few.

Why are Taft-Hartley Plans Turning to SEI's Manager of Managers Program? (PDF)

The Fallout of Reform: How Multiemployer Plans Can Better Manage Credit Balances & Funding Levels

For multiemployer pension trustees, the recently passed funding reform adds to the complexities inherent in pension plan management. Prior to reform, trustees concerned themselves with avoiding a short-term funding deficiency (credit balance equal to 0) while ensuring the plan met long-term funding objectives. Enter the Pension Protection Act (PPA) and trustees are now strongly incented to also monitor their plan's funded status to avoid being labeled "endangered" or "critical".

The Fallout of Reform (PDF)