Calvin Jordan, CEO of the Nova Scotia Association of Health Organizations Pension Plan in Bedford, N.S., discussed how this DB plan uses leverage to improve its asset liability matching at the Pension & Benefits Conference today in Toronto.
The $3.6-billion plan’s asset mix is 25% fixed income (65%, but 40% is leveraged), 40% equities and 35% alternatives. “That [alternatives] may be on the high side,” said Jordan, “but it’s not including hedge funds.”
Using leverage in its asset strategy causes an increase in risk to the assets but a decrease in risk to the balance sheet, he explained.
Strategy has nothing to do with past results, said Jordan, it’s whether your strategy glues everything together.
Watch for more to come on this topic.
Other stories from the Benefits & Pension Summit: