Cash balance plans are booming — but so are the challenges that come with hedging their unique liability profiles.
Approaches to this dynamic range from the simple to the pragmatic to the precise.
Although there is no silver bullet, we believe our experience working with cash balance plan sponsors provides a clear framework for evaluating the available approaches.
We find that each alternative carries trade offs, and the optimal strategy depends on the sponsor’s risk tolerance, plan design and broader investment objectives.
