Managing the ups and downs of retirement contributions is a major concern for employers. 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.
Sibson Consulting'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 are provided by Segal Marco Advisors, our SEC-registered investment solutions affiliate.
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 — this process 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.
Sibson offers 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.