The case for bundling actuarial and investment advice
In defined benefit plans, timing matters as much as strategy.
In defined benefit plans, timing matters as much as strategy. Outcomes are typically determined not by assets or liabilities in isolation, but by how the two interact over time. Yet many plans still manage these levers separately, relying on different providers, data sets, and decision cycles. That separation increasingly looks ill-suited to the complexity and pace of today’s DB landscape.
The case for closer alignment between actuarial insight and investment strategy has rarely been stronger. Improving funded status levels, evolving accounting and funding pressures, and a growing menu of de-risking and endgame options mean that sponsors can no longer afford to review investment strategy in a silo. Decisions about asset allocation, risk budgets, and implementation must be informed by an understanding of liability behavior, contribution policy, and plan objectives — and vice versa.
More than a century ago, Andrew Carnegie famously challenged the conventional wisdom of diversification, arguing: “Put all your eggs in one basket, and then watch that basket.” For pension plans, integration is about exactly that — not concentration of risk, but concentration of accountability, insight, and execution.
The potential benefits of bundling
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Streamlined coordination:Plan sponsors spend less time reconciling views across providers and more time focusing on strategic questions that matter most to outcomes. Governance may become simpler, clearer, and more efficient.
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Specialized strategy design:Effective pension strategy blends financial objectives, funding policy, and investment implementation into a coherent whole. Whether a plan is open and accruing, frozen and de-risking, or approaching termination, aligning the earning and funding sides of the equation is critical to choosing the right path.
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Speed:Opportunities to rebalance, hedge, or de-risk can be fleeting. When asset and liability data flow through a single framework, sponsors can act more quickly and adapt as conditions change, rather than waiting for sequential analysis across disconnected teams.
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Integration and clear accountability:When one team owns the full journey from advice through to execution, we believe decision-making can be sharper and outcomes are easier to evaluate. And while cost should never be the sole driver, integrated models can support efficiencies through reduced duplication, pricing synergies, and scale benefits.
Critics of integration argue that keeping actuarial and investment services separate preserves objectivity and avoids conflicts of interest. Some plan sponsors value having distinct perspectives or relying on investment providers that focus solely on investment. These concerns deserve consideration, and in certain circumstances an unbundled approach may feel appropriate.
But the reality is that many of today’s most important pension initiatives demand close, ongoing collaboration between asset and liability expertise. Liability-driven investing, pension risk transfer, dynamic de-risking, and surplus management all require continuous alignment between funded status, market conditions, and execution. In these areas, speed, coordination, and shared accountability are essential.
As pension plans move from accumulation toward risk management and endgame execution, the question is no longer whether assets and liabilities should be managed together in theory, but whether governance models are fit for that purpose in practice. For many sponsors, bundling actuarial and investment services may help unlock greater speed, adaptability and cohesion in the management of their plan.
