SEI Global Poll: 4th Annual Poll Finds Interest In Liability Driven Investing Remains High
OAKS, Pa., Dec. 1, 2010 /PRNewswire/ -- An SEI (Nasdaq: SEIC) Global Quick Poll released today shows that the number of pension plans adopting liability driven investing (LDI) strategies has remained steady over the past year. The poll shows that half (50 percent) of all polled plan sponsors are currently using LDI, compared to 54 percent in 2009 and only 20 percent in 2007. The fourth annual LDI poll was completed by 110 executives overseeing pensions ranging from US $30 million to more than US $5 billion in assets. None of the poll participants were current institutional clients of SEI. The poll highlights how the benchmark for pension success has continued to shift away from absolute return and also shows trends around the specific objectives of LDI and investment products being used.
"While the interest in liability driven strategies remains high, the reality is that the timing of implementation will differ from one organization to the next. There are often numerous moving parts within these complex strategies and pension plan sponsors need their providers to deliver expertise and guidance," said Jon Waite, Director, Investment Management Advice and Chief Actuary of SEI's Institutional Group. "At a time when funding levels are low, pensions plan sponsors need insight around how these strategies can be implemented now and in the future to best protect the plan's funded status."
The global poll was conducted by SEI's Pension Management Research Panel and included pension executives from the Netherlands, United Kingdom and United States. This year's results remained on par with 2009 results with only a few exceptions. The most popular benchmark for pension investment success remained "improved funded status," selected by 38 percent. However, this year 22 percent of poll participants selected "minimize or control contributions," thus surpassing "absolute return" as the second most popular primary benchmark.
For the third consecutive year, the most popular definition of LDI among poll participants was different from the previous year, but the top two definitions have remained consistent. "Matching duration of assets to duration of liabilities" was the most popular definition last year, but finished second this year (30 percent). Last year's second most popular definition, "a portfolio designed to be risk managed with respect to liabilities," was the top definition this year, chosen by 39 percent of the poll participants.
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