JPMorgan Asset Management today unveils its newest thinking in effective pension plan management, a white paper entitled, "Corporate Finance Meets Pension Management: a New Era for Pension Leaders".
White Paper details Pension Risk Framework Solution for U.S. Corporate Pension Plans and their Sponsors
New York, January 17, 2007 - JPMorgan Asset Management (“JPMAM”) today unveils its newest thinking in effective pension plan management, a white paper entitled, “Corporate Finance Meets Pension Management: a New Era for Pension Leaders”. In the light of new funding regulations and accounting rules, JPMAM’s white paper is proposing a ‘corporate finance approach’ to U.S. corporate pension plan management, and details a new holistic pension risk ‘framework’ for corporations to adopt. The proposed approach is designed to bring long-term stability and improved financial health both to the pension plan and the organization that sponsors it.
A Corporate Finance Approach:
With the passage of the Pension Protection Act of 2006 (PPA) and the issuance of SFAS 158, JPMAM is recommending that pension plans dramatically rethink their existing approach to asset allocation and risk management by adopting a ‘corporate finance approach’ to pension plan management. Applying to pension plans the same risk management tools guiding a company’s core business units will enable senior management to make more informed pension decisions - and assess the potential impact of those decisions on both the plan and shareholder value.
The corporate finance approach intends to identify an asset allocation that achieves the desired level of return for the pension plan while empowering the CFO and CIO to:
• Gain greater control over the balance sheet risk exposures resulting from the plan,
• Reduce the level and volatility of contributions,
• Minimize corporate earnings at risk.
JPMorgan Asset Management Recommends Corporate Finance Approach to Pension Management in the U.S.
