Asset/Liability Analysis

Asset allocation decisions need to be made with a clear and thorough understanding of the liability while also considering the goals and objectives of the organization. We maintain our own internally-developed, proprietary systems to conduct asset/liability studies using data from our clients’ actuaries. LCG’s asset/liability studies consider the following:

  • Current and historical funded ratio
  • Growth rate of the liability
  • Duration of the liability
  • Future contributions and payout trends
  • Potential liability driven glidepath

To provide a thorough analysis of the tradeoffs associated with various asset allocation strategies based on the organizations’ unique circumstances, the asset/liability study will assess what asset allocation discipline will keep the plan adequately funded and if any changes to the current asset allocation policy are warranted. We recognize that there is no “free-lunch.” As a result, a thorough assessment of the impact of a Liability Driven Investment (“LDI”) strategy versus a total return strategy is critical.