Top 10 Priorities for Pension Plan Sponsors

An SEI Quick Poll released Tuesday found pension plan sponsors’ number one priority is finding a way to control funded status volatility.

Four out of five (84%) participants view this as a priority, with 76% identifying it as a "high priority."

"Effectively addressing this year's priorities will be no easy task for pension plan sponsors, “Jon Waite, director of investment management advice with SEI, said in a statement. “Pension management is a complex set of moving parts and the priorities identified in this poll are a sign that executives overseeing these plans are taking a more holistic view. We're seeing an encompassing high level priority of 'regaining control' and many plan sponsors are looking externally for expertise and new techniques to get this accomplished."

While controlling funded status volatility came in as the top priority, providing senior management with a long-term pension strategy took second.

The top 10 priorities are as follows:

Controlling funded status volatility;

Providing senior management with long-term pension strategies;

Improving plan's funded status;

Conducting an asset-liability study;

Effectively managing duration moving forward;

Implementing a Liability-Driven Investing (LDI) approach using long-duration bonds;

Defining fiduciary responsibilities for trustees and investment consultants;

Changing funding policies and timelines;

Stress-testing the portfolio to gauge its ability to withstand extreme macroeconomic environments;

Implementing a plan design change, such as closing the plan to new entrants or freezing accruals in already closed plans.

Defining fiduciary responsibilities for trustees and investment consultants moved up two spots from last year, with nearly two-thirds (64%) of participants listing it as a priority. Although ranking seventh, SEI says the move is notable, as it suggests that the Department of Labor's proposed regulations (which will likely include those providing investment advice to a defined benefit plan) are weighing on the minds of plan sponsors.