The pandemic-driven extension of the “lower for longer” interest rate environment will likely be a headwind for return expectations and asset class outperformance in 2021. For DB pension plans, many of which are in funding deficit rather than surplus, this may be problematic for both liabilities and portfolio performance. More than ever, plan sponsors should consider developing a glidepath to try and improve plan funding levels and maintain discipline and focus in sticking with it.
Clear Path Analysis’s Pension Plan De-Risking North American 2021 report will address a number of concerns when published in Spring 2021. Conning’s Sean Kurian, head of the firm’s Institutional Solutions group and author of the report’s Forward, offers a preview of some of the topics in a Q&A, shedding light on some of the short- and long-term issues facing sponsors.