Pension funds face a low yield environment for the foreseeable future. This is at a time when many are underfunded and traditional approaches to pension management are struggling to make a difference. In response, Algorithmics, an IBM Company, has launched a new edition of its existing solution, Portfolio Construction and Risk Management for Pension Funds, to help pension funds better manage their funding status.
Algorithmics has recently signed the $6.9* billion Alberta Teachers’ Retirement Fund Board (ATRF) as a client for the new Monitoring and Reporting Edition of the Pension Fund solution. ATRF will use Algorithmics to enhance risk transparency and assist in making risk-informed decisions.
Derek Brodersen, Chief Investment Officer of ATRF, said: “Pension funds are increasingly being required to meet higher standards for risk management. With Algorithmics we have a solution that helps us address our fiduciary requirements. Our former risk advisory service used Algorithmics as its technology platform so we are familiar with the software and the quality of risk analytics to help set and monitor our performance against agreed risk targets and limits.”
The Monitoring and Reporting Edition of the Pension Fund solution has been designed to be more than just a technology solution: it meets pension funds’ need for education in the areas of risk management, measurement and governance; provides a risk monitoring and reporting service; and provides advisory services to help pension funds turn knowledge into action. Hosted by Algorithmics, the new edition offers a comprehensive, yet cost-effective data management, validation and risk service that averts the need for in-house infrastructure or staffing. This helps pension funds of all sizes address key questions about the levels and sources of different risks and can include an interpretation of the risk reports to support pension clients in making risk-informed decisions.
Dr Andrew Aziz, Executive Vice President of Buy-Side Risk Solutions at Algorithmics, commented: “Pension funds are facing more complex and volatile markets. While this requires sophisticated understanding of investments and risk, many smaller funds lack specialized staff, data and infrastructure to meet evolving needs. To assist these funds, Algorithmics has designed a comprehensive solution that helps them understand the risks they face and how to use this insight to meet their fiduciary duties more effectively. Ultimately, this helps pension funds meet their promise to fund pension liabilities, and to achieve other value added objectives as well.”
With asset managers, LDI managers, fiduciary managers, regulators, specialist pension buy-out insurers and asset servicers as clients, Algorithmics already has a significant footprint in the world of pensions and has now tailored a solution to meet the specific risk needs of the broader pension market.
* Value as at 30.04.2012