PBGC abandons liability-driven investment

The US Pension Benefit Guaranty Corporation (PBGC) has called time on its commitment to liability-driven investment (LDI) after admitting its current strategy has a less than one-in-five chance of meeting future funding needs.

The fund, responsible for the pensions of 1.3 million US workers and retirees, currently holds $55 billion in assets and plans to allocate 45% into fixed income, a further 45% in equities and 10% in alternative investments in the hope of better performance and lower risk.

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