ING U.S. Investment Management Introduces LDI Collective Trust; Innovative Strategy Assists Plan Sponsors More Effectively Meet Future Benefit Needs
ING U.S. Investment Management has introduced a customizable Liability Driven Investing (LDI) collective trust solution that can help plan sponsors better manage their assets to meet future benefit payments. The collective trust’s long, corporate bond exposure can more closely match pension liabilities than generic, long-duration strategies that typically combine corporate and government bonds or only use the latter.
LDI has become an important consideration for pension plans in recent years, particularly given new regulations requiring plans to more specifically manage their assets towards the goal of paying future benefits. The challenge has been that many LDI solutions are either institutional separate accounts requiring high asset balances or non-customized solutions consisting of a mix of government and corporate credits that do an imperfect job of matching assets to liabilities.
“The LDI collective trust vehicle can be a very efficient way for plan sponsors to meet their future payment needs,” said Frank Van Etten, Deputy Head of Multi-Asset Strategies and Solutions at ING U.S. Investment Management. “This structure can work well for plans just beginning the LDI process or those looking to immunize a large portion of their liabilities and can be customized to meet their specific needs.”
According to Van Etten, the new LDI collective trust is innovative in its ability to closely align a pension plan’s assets and liabilities to help assure that liability volatility can be managed within an expected deviation. The strategy is managed by ING U.S. Investment Management’s Multi-Asset Strategies and Solutions (MASS) and Fixed Income teams, including in-house actuarial staff that works to balance the asset-liability mismatch, portfolio yield and concentration risk in a plan’s investment policy.
Van Etten, who was part of a team at ING Europe that successfully launched a similar strategy, commented, “Our experience in Europe has demonstrated that this approach will work well for small- and mid-sized plans, and can also be a very effective solution for large plans as well. It is another example of our efforts to develop LDI solutions that meet the needs of a wide range of clients.”
ING U.S. Investment Management manages LDI strategies, ranging from scalable commingled solutions to fully customized long duration mandates. For more information about ING U.S. Investment Management and its LDI capability, please visit http://www.inginvestment.com/US/home/.
About ING U.S.
ING U.S. constitutes the U.S.-based retirement, investment and insurance operations of Netherlands-based ING Groep N.V. (NYSE: ING). In the U.S., the ING family of companies offers a comprehensive array of financial services to retail and institutional clients, including retirement plans, IRA rollovers and transfers, stable value, institutional investment management, mutual funds, alternative investments, life insurance, employee benefits, fixed and inded annuities and financial planning. ING U.S. holds top-tier rankings in key U.S. markets and services approximately 13 million customers across the nation. For more information, visit http://ing.us.
About ING U.S. Investment Management
ING U.S. Investment Management (ING U.S. IM) is a leading active asset management firm. As of June 30, 2012, ING U.S. IM manages approximately $173 billion for both affiliated and external institutions as well as individual investors. ING U.S. IM has the experience and resources to invest responsibly across asset classes, geographies and investment styles. Through our global asset management network, we provide clients with access to domestic, regional and global investment solutions.