Our approach

Key benefits

We work with you, your investment committee, and your consultant to help lead your defined benefit (DB) pension plan to full funding and, importantly, to lessen its impact on your organization's financial statements.

Help with derisking, immunization, and other LDI strategies

Whether your DB plan is open, frozen, or you're seeking to offer a lump-sum window, Vanguard has the expertise, tools, thought leadership, and products to develop solutions and implement strategies that help achieve your DB plan objectives.

Your plan, Vanguard investments

The breadth of our investment menu fully supports investment strategies designed to help you:

  • Remove uncompensated risk from your plan.
  • Achieve higher funding levels.
  • Manage volatility without overfunding and stranding surplus assets in your plan.
  • If your plan is frozen on its way to termination, optimize your final investment and distribution strategies as your plan moves closer to termination.

Fixed income for liability-matching precision

As your plan's funding level improves, removing pension risk will become more important. Bonds can help accomplish this, from soon-to-be-paid liabilities, as well as those decades out. Learn more Launch PDF

 

The ability to keep an equity allocation while derisking

Plan sponsors who maintain a traditional 60% equity portfolio can still start derisking without changing their equity commitment. Learn how 

 

Your glide path to help achieve and maintain full funding

Vanguard experts work with yours to develop and implement a dynamic investment policy statement that maps a glide path to full funding and helps maintain it. As your plan moves along its glide path, asset allocations will shift:

  • Equity allocations should decrease as funded status improves.
  • Fixed income allocations to corporate bonds will increase and align with your plan's liabilities.

 

Sample glide path, frozen plan pie charts


 

Notes

  • All investments are subject to risk, including the possible loss of the money you invest.
  • Bonds and bond funds are subject to the risk that an issuer will fail to make payments on time, and that bond prices will decline because of rising interest rates or negative perceptions of an issuer's ability to make payments.
  • U.S. government backing of Treasury or agency securities applies only to the underlying securities and does not prevent share-price fluctuations. Unlike stocks and bonds, U.S. Treasury bills are guaranteed as to the timely payment of principal and interest.
  • Diversification does not ensure a profit or protect against a loss in a declining market.
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