Three Ways Liability-Hedging Portfolios Should Change as They Grow
With that increase in funded ratios, plans have tended to de-risk, increasing the proportion of liability-hedging assets in their portfolios.
Since the end of 2020, the Projected Benefit Obligation (PBO) funded ratio for the average pension plan in the S&P 500 has grown from 88% to well over 100%.1 With that increase in funded ratios, plans have tended to de-risk, increasing the proportion of liability-hedging assets in their portfolios.
