The DB End Game - Helping Schemes Prepare for the Finish Line

Recent years have seen trustees and corporate sponsors of defined benefit (DB) schemes explore ways of managing and reducing risks as they meet their obligations to members. We discussed the routes available in our paper, ‘Demystifying the DB End Game’.

As a leading global fixed income manager, State Street Global Advisors can offer clients the full range of derisking capabilities, including liability-driven (LDI) and cashflowdriven (CDI) investment and Target Leverage Funds. Here, we present three hypothetical case studies showing how we could help our clients reach a stronger position on their end game journey. The three DB schemes outlined start with different challenges, but could ultimately achieve more certainty over their scheme risks and
cashflows requirements.

The solutions we could provide all include LDI strategies to better match inflation and interest rate risks, while using leverage to free up assets to be invested elsewhere. The strategies also involve CDI allocations that help meet scheme payments to members without the need to become forced sellers of assets in volatile markets.