Close Menu

Oxford Financial Group, LTD


Oxford Financial Group, LTD


Highly Tailored Financial Plans

Creating sophisticated, long-term financial solutions that are highly tailored to your individual needs.

Case Study

We have a current multiemployer plan balancing the maintenance of a traditional liability driven approach against a shift to targeting a long term expected portfolio return. Given funding rate relief available to this client, the Plan is deemed to be fully funded under one set of actuarial assumptions, but underfunded based on another. We are helping the client balance a potential blend of these approaches that could best suit a range of future scenarios they want to address optimally. 

Oxford is helping this client’s Pension Board evaluate the exclusive use of a mix of intermediate and long duration government bonds to "immunize" their portfolio as it approaches fully funded status. However, if the client’s actuary uses a more conservative interest rate in discounting the value of future liabilities, the funding status changes materially. Considering which of the two actuarially appropriate discount rates to apply to the future liabilities is related to funding relief available to this particular client. The situation creates multiple investment approaches that could be most appropriate to apply going forward. 

In this case, Oxford is providing detailed comparisons of the risk and return parameters for the traditional Liability Driven Investment (LDI) approach versus seeking a more traditional long term expected return approach. The second option would be created using a highly diversified portfolio of stocks, bonds, inflation hedging strategies and absolute return oriented investments. Together, since inflation hedging and absolute return strategies may be able to generate more return than bonds, but without as much risk as stocks, our client is evaluating a potential blend of LDI and traditional approaches given the range of options regulators allow in how to calculate their actuarial funding status.