The increasing complexity of pension investment management and the need to control the negative impact of investment volatility upon corporate financials are prompting organizations to reevaluate the management of their pension investments, according to a poll.
An SEI poll finds that 55% of organizations say they were re-evaluating their investment management approach with 42% reporting that the main factor for considering alternative approaches is a need to better control investment volatility.
Almost all(95%)acknowledged that the traditional consultant model of pension investment management is not the only available option to their organization.
The survey asked pension plan sponsors, at various corporations across Canada if investment management is increasing in complexity.
Seventy percent of managers, who use the traditional consultant model of pension management, said they feel managing pension investments has become increasingly complex. In contrast, only half of sponsors polled, who handle investment decisions internally, felt the same way, with only 8% of those who use a manager of managers model noting an increase in complexity.
“As pension investments become more difficult to manage, plan sponsors are recognizing that it is time to evaluate the current approach and determine if it addresses their new challenges,” says Andrew Kitchen, managing director, strategies & solutions, SEI Global Institutional Group. “Pension plans are negatively impacting company financials and are drawing increased scrutiny. In response, executives are looking for ways to manage pension risk the same way other organizational risk is managed.”
The poll was completed by a total of 100 organizations with pension assets under management ranging from $25 million to more than $1 billion.
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