Liability driven investments
What is liability driven investments (LDI)
Liability driving investments means investing assets to move like liabilities. LDI can help reduce cash contribution and financial statement volatility, and Sun Life's private asset classes can provide diversification and enhanced yields.1
How do liability driven investments work?
DB Solutions works with plan sponsors, their consultants and Sun Life Institutional Investments (Canada) Inc., to develop custom fixed income and/or derivative portfolios to match the pension plan's expected liabilities. Solutions can be simple or sophisticated depending on the plan sponsor's needs and investment policies.
What are the advantages of liability driven investments for plan sponsors?
- Reduced volatility of cash contributions
- Reduced volatility of earnings per share and balance sheet items
- Can facilitate future annuity purchase
- Assets are maintained and can be used to fund longevity insurance premiums
- Assets can be optimized to provide additional yield and diversification
Access our liability driven investing solution sheet for more details.
Where to start?
Contact us for a non-binding customized illustrative quote at no cost. For more information about what details we need, access our liability driven investment quote data requirements.
Who provides LDI solutions?
Defined Benefits Solutions works in close collaboration with Sun Life Institutional Investments (Canada) Inc. to provide liability driven investing solutions. Sun Life Institutional Investments manages the underlying investments that constitute the LDI mandates, while also partnering with DB Solutions to develop customized strategies, grow new business and provide ongoing client servicing.
Sun Life Institutional Investments (Canada) Inc. is a Canadian registered portfolio manager that was established in Canada in August 2013 to offer customized investment solutions, specializing in open-ended private asset class pooled funds, to institutional investors. Visit www.sunlifeinvestmentmanagement.com for more information about the company.
1 Liability driven investment solutions are provided by Sun Life Institutional Investments (Canada) Inc., a Canadian registered portfolio manager, investment fund manager, exempt market dealer, and in Ontario, commodity trading manager. Access sunlifeinvestmentmanagement.com for more information about the company.
2 The Purple Book, 2014 and 2015 KPMG LDI Survey
The DB Pension Division
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Risk Management Conference
Watch presentation by Steve Morris and Heather Wolfe on why pension plans should invest like insurers.
- £657 billion of U.K. pension assets managed with reference to their liabilities.2