Managing the ups and downs of retirement contributions is a major concern for multi-employer, public sector and private sector retirement plans. Because plans can face significant fluctuations in contributions from year to year, you need tools that can help predict how changes in economic and budgetary conditions could affect plan contributions, and what steps you can take to mitigate your risk through options such as pension plan de-risking.
Segal's asset-liability modeling (ALM) is a tool that can be used to make sound decisions regarding plan assets and liabilities. It is particularly helpful in comparing the effects on plan funding of one or more sets of future "what if" scenarios. ALM services seamlessly merge the expertise of Segal Consulting and Sibson Consulting actuaries and Segal Rogerscasey investment consultants.
ALM can be applied to every part of the plan process: plan design, plan governance, and investment management. You should especially consider ALM if you are contemplating changes to:
ALM looks at two different categories of events that can affect your plan: changes that you can control, such as funding method, benefit design or asset allocation; and changes that you cannot control, such as investment returns, market volatility or inflation.
We identify the likelihood and impact of changes in these elements, which allows you to adjust investment and funding policies. In addition, it provides you with a deeper understanding of how alternative investment strategies, benefit designs, and funding methods interact and influence funding levels and contribution requirements.
We offer two different types of ALM: deterministic and stochastic.
We provide independent consulting advice and are able to make unbiased recommendations because we are not associated with any asset manager or brokerage firms.
We use one of the premier asset-liability software models in the industry, developed by Dr. Irwin Tepper, a leader in the field of ALM. Our results-oriented consulting approach — coupled with input from the plan's investment advisors — combines actuarial and investment expertise with a clear, accurate and objective focus on each client's needs.
Segal uses a dynamic, real-time modeling tool to increase understanding and facilitate decision-making by allowing plan sponsors to view and assess emerging retirement plan finances.
Our calculation begins with a baseline projection of key outcomes you choose. It then allows you to model "what-ifs" such as investment returns, varying amortization alternatives and modifications in benefit design.
Segal’s live modeling can project recommended contributions, funded percentage and other crucial information of interest to you.