From Silos to Synthesis

Plan sponsors today face an unfamiliar landscape, devoid of landmarks. Outsized investment performance — once expected — now seems far beyond reach. Old assumptions about risk and responsibility no longer serve as useful guides. One misstep now and the consequences can be brutal.

Heightened fiduciary concerns have forced investment managers to re-examine past practices. Yet within fiduciary constraints (and sometimes because of them) opportunities still exist to generate returns in line with the expectations of plan participants.

FiduciaryOne thing is certain — investment management, corporate governance and legal oversight no longer can exist as separate silos. Indeed, they will act in synergy if plans are to be successful. That shift — from silos to synthesis — has significant implications that policy makers across the pension plan industry have only begun to consider.

In this space we will address some of the more critical implications. What does the new landscape look like? Who stands to benefit and how? What are the new best practices?

And we’d also like to hear from you too. If you have a comment on something we’ve written or a suggestion for a future topic, please contact us at


Article: Talk to Your Portfolio Manager (PDF)
As Mitch explains in his comments, fiduciaries must understand the impact of the European debt crisis on their portfolios. Turns out, this is a lot easier said, than done.
Article: Stable Value/Tough Choice? (PDF)
Plan sponsors have an important decision to make–which “cash” vehicle should the plan offer to participants? It would seem to be an easy decision. There are relatively few choices: stable value fund or a money market fund. Such an easy decision … seems like a no brainer.
Article: Hedge Funds, What is a Plan Sponsor to Do? (PDF)
The low interest rate environment has made finding investments appropriate for pensions, foundations and the like very difficult. So, after several years of withdrawals, investors are returning to hedge funds in hopes of achieving this diversification as well as favorable investment results.
Article: Is Now the Time to Increase the Risk in your Investment Portfolio? (PDF)
The answer is yes, maybe and no.
Article: Target Date Funds (PDF)
Target Date Funds reign supreme — the answer to everyone’s retirement woes. Trust us, make regular contributions over your 30 year career, and we’ll provide you with a retirement fit for a king. My own simple experiment, however, using common sense, and forgoing complicated analytical tools, has led to a simple conclusion. Target Date Funds — The emperor has no clothes.
Fiduciary Alert: Cash Funds (PDF)
The credit crisis of 2007-2009 generated a seismic shift of investment assets into ‘cash’. However, as the crisis induced panic fades, many corporate investors are deeply frustrated by the continuing low yields of cash. This is a time for caution. The smart cash manager asks lots of questions.
Fiduciary Alert: Stable Value (PDF)
After years of obscurity, Stable Value investment options are front and center again. Seemingly simple, HFG points out what makes Stable Value markedly different from any other investment option and why they require your attention.
White Paper: A Framework for Pension Investment Strategies (PDF)
The sole investment objective of a defined benefit plan is to pay future liabilities. When managers’ decisions are made in that light and only that light, their stated goal to fund plan liabilities will consistently match their actions.
White Paper: Cutting the Retirement Plan Millstone Down to Size (PDF)
The responsibility and personal liability of pension plan fiduciaries are an ever-growing weight around the necks of corporate directors and officers. A new fiduciary model lifts the burden.

Guest Contributors

Turn on the Lights (PDF)
We are currently in the early stages of a great energy revolution. Energy is the fuel for economic growth, and the transition to supplementing carbon-based fuel sources such as coal and oil with cleaner energy will be a very long-term, secular growth trend.
Active v. Passive Management: The Perennial Question (PDF)
Managing the equity portfolio of a retirement plan, endowment,or family trust, can be a challenging task. There are many trade-offs to be made, and each trade-off must be viewed through the lens of fiduciary responsibility to the plan.

Other Leading Experts

Provides thought leadership, access to experts and research data on fiduciary and investment issues.
Center for Retirement Research at Boston College
Broad-based and insightful research. Center is let by Alicia Munnell, Ph.D., who served as a member of the President’s Council of Economic Advisers and Assistant Secretary of the Treasure for Economic Policy.
The Millstein Center for Corporate Governance and Performance
Focuses on the role of the corporation in society. Faculty and leadership drawn from academia, business and government.
Employee Benefits Security Administration (Department of Labor)
Regulatory information and guidelines, explanation of policies, fiduciary education.
Rotman International Centre for Pension Management (University of Toronto)
Global policy research. Influential group of leading academics with an important voice in the global pension policy discussions.
Employee Benefits Research Institute
Industry-supported institute which aggregates data benefits-related data from multiple sources and conducts surveys.
The Pension Research Council of the Wharton School of the University of Pennsylvania
Industry-supported council providing significant policy research.