Wealth and Investments

Pension Risk Management

Balancing Funding, Costs, and Risk

Funding for pension plans has recently endured extreme fluctuations, which will likely continue in the near future. Although strong returns from equities and higher bond yields increase plan funding, they also provide an opportunity to develop and implement an effective risk management strategy.

An Integrated Approach

Mercer provides clients with a holistic approach to pension risk management — one that aligns strategy with the plan’s overall funding status. Mercer’s pension risk consultants have expertise in developing sophisticated strategies that include:

  • Setting glide paths and de-risking levels.
  • Integrating risk management with funding improvement.
  • Liability-driven investments.
  • Derivatives.
  • Buyouts.
  • Risk-transfer scenarios.

De-risking Dynamics

Mercer can help plans exploit opportunities to de-risk and react dynamically to changing market conditions. We can help establish glide paths and trigger levels. Most plans base triggers on funded status, but we go beyond that and work with clients to develop triggers based on interest rates, allowing plans to lock in higher interest rates automatically. For organizations seeking to terminate their plans, we can help develop time-based triggers.


Once a strategy or glide-path approach is set, Mercer can help develop an integrated governance structure to ensure the plan meets its program objectives. Mercer relieves organizations of the responsibility for monitoring the glide path, trade executions, and manager selection, as well as contracting and oversight, allowing you to concentrate on your organization’s core competencies.

Delegated Investment Management Solutions

Mercer provides Delegated investment management solutions for clients across the globe. We provide multinational organizations with a single point of contact for providing consolidated fiduciary information to sponsors and trustees.

  Speak with a Mercer Consultant

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