Defined benefit pension solutions to help you reduce risk and pursue better outcomes
Delivering positive retirement outcomesManaging a DB strategy is not as easy task. In attempt to deliver better returns, you need to be able to identify and seize opportunities that help to meet your long term funding requirements, while dealing with challenges such as sustainability, longevity, interest rate volatility and regulatory pressures.
Limiting plan risk exposureGenerally speaking, it is important that DB plans manage the risk of future underfunding and take steps to ensure member benefits are appropriately secure. To assist in managing these uncertainties, plan fiduciaries can usefully consider a range of solutions including investment strategy, hedging, risk transfer, offering member options, and arranging financial support.
How to address common defined benefit pension challenges
Depending on your risk appetite and objectives, there are a number of strategies you can consider to manage your pension risk. You could adopt a strategy that reduces your risk exposure to fluctuating markets or one that enables fast reactions to capitalise on dynamic market changes for example.
Your risk appetite should align to your overall funding goals and enable you to explore the benefits of de-risking options (including buy-in or buy-out), liability-driven investments and asset liability modelling.
Our pension risk consultants can help you set up glide paths and de-risk levels, and integrate risk management with funding improvement, liability driven investments (LDI), asset liability modelling, portfolio construction, member options, and risk transfer options such as buyout.
Changes in regulation, legislation, political uncertainty and market volatility are driving investors to pursue a wider range of opportunities across the pension balance sheet to seek return potential or manage your risks.
Many asset managers and investment strategies are now more aware of their wider social context and are incorporating sustainability goals. To implement an investment strategy that reflects your long-term liabilities and goals, you need to be able to identify and develop the right strategic asset allocation and portfolio of asset managers to meet your needs.
We can help you examine a large range of asset classes and market/return drivers to create what we believe to be an optimal strategic plan to help meet your plan's growth objectives with an appropriate risk profile.
Actuarial requirements will include regular valuation, monitoring of your funding position, budget forecasting and compliance requirements. This may involve coordination over multiple plans in different geographies, or fulfilling local requirements. You may need to examine retirement plan design, to address regulatory change, to encounter impact from corporate transactions, or even to address potential plan termination.
We have credentialed actuaries and analysts around the world that can help you to fulfil your actuarial requirements. To find out more about actuarial services in your jurisdiction, contact us.
Access to external expertise and resources can help alleviate the administrative burden of pension plans. Whether your plan is open or closed, accruing or frozen, we can help you alleviate resource constraints, administer plan complexities, and manage compliance risks.
Our services range from co-sourced to fully outsourced — and include temporary assistance during times of critical business or staff change.
Mercer Pension Risk ExchangeAn online marketplace for organisations and trustees considering a bulk annuity transaction. The exchange provides direct access to up-to-date insurer pricing and shows the cost of an annuity transaction relative to scheme funding and accounting metrics. Contact us to find out more.
Mercer Dynamic De-risking SolutionCapitalising on our risk management and operational expertise, this solution provides a framework to define your target endgame, along with a roadmap to get there. The roadmap helps you to react to market conditions and continue on the path to your desired outcome. Contact us to find out more.
Implementation and OCIOWe can help you define, develop and implement your investment strategy by addressing areas such as governance, risk, sustainability and diversification. We flex our services to suit your needs and help you achieve your investment goals.
Defined benefit (DB) dashboardThis is an interactive online tool that provides an overview of key statistics from all your defined benefit plans globally, including investment strategy, funding position, projected cash flows and value at risk. It can be customised to drill down to different levels of plan information, and allows users to assess ‘what-if’ scenarios. Contact us to find out more.
Sustainable investmentsWe help you build a sustainable investment strategy that integrates environmental, social and governance (ESG) considerations; diversity, equity and inclusion (DEI) factors and seeks an optimal mix between positive change and favourable returns.
Asset manager researchBy subscribing to MercerInsight®, an alliance with eVestment, you can gain access to data, analytics and our forward-looking research on asset managers and thousands of investment strategies across both public and private markets.
Global and local actuaryFocusing on issues impacting the benefits and wider compensation needs of multinational organisations, we provide advice, strategy and coordinated delivery of global and regional solutions. Leveraging our proprietary Mercer Globe tool, we provide global coordination of funding and accounting valuations, assumption setting, consolidated reporting and global DB and DC plan management. Contact us to find out more.
Transaction ServicesOur teams are deeply experienced in helping clients managing the complexities of transactions such as buy-ins, buy-outs and large member option programmes. We can draw on deep industry relationships, including with the insurer community, to assist clients in assessing the feasibility and optimal design of such solutions, along with assisting at every stage of the implementation journey. Contact us to find out more.
Strategic researchBecome a member of the MercerInsight® Community today to get access to strategic research from hundreds of thought leaders around the world, including Mercer and third-party publishers. It’s complimentary and easy to join.
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1 ESG investing refers to environmental, social, and governance considerations that may have a material impact on financial performance, and therefore are taken into account, alongside other economic and financial metrics, in assessing the risk and return potential of an investment. Thematic investing involves investing with a goal, at least in part, to achieve an impact on an environmental, social, or governance issue, alongside generating return and mitigating risk. As always, the decision whether to invest in ESG-themed options, like all options, must be made pursuant to a prudent process with the objective of advancing the financial interest of the plan and its participants.
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