Pension Management

Pension Management

Pension management involves the administration and oversight of pension plans, ensuring that they are financially sustainable and capable of meeting the retirement needs of participants. Effective pension management requires a thorough understanding of investment strategies, regulatory requirements, risk management, and actuarial principles.

Defined Benefit (DB) Plans

Guarantee a specific retirement benefit amount based on salary and years of service.

Defined Contribution (DC) Plans

Retirement benefits depend on the contributions made and the investment performance of those contributions.

Hybrid Plans

Combine elements of both DB and DC plans. Examples include cash balance plans.

Pension Management Process

Plan Design and Implementation:

  • Establishing the type of pension plan and its features, such as contribution rates, benefit formulas, and vesting schedules.
  • Implementing the plan and enrolling participants.

2. Ongoing Administration:

  • Managing day-to-day operations, including record-keeping, contributions processing, and benefits distribution.
  • Ensuring compliance with legal requirements and maintaining accurate participant records.

3. Investment Management:

  • Developing and implementing an investment policy statement (IPS) to guide the plan’s investment strategy.
  • Selecting and monitoring investment managers and performance.

4. Periodic Review and Adjustment:

  • Conducting regular reviews of the plan’s performance, funding status, and regulatory compliance.
  • Making necessary adjustments to the plan’s design, funding strategy, or investment approach.

Emerging Trends in

Pension Management

  1. Sustainable Investing
  2. Technological Advancements
  3. De-Risking Strategies
  4. Focus on Financial Wellness
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