NBA 5460 - Liability Driven Alpha

Spring. 1 credit.

R. Marin.

This course will focus on the fundamental trends underway in the pension management industry. This $3 trillion arena has, from before the creation of ERISA to the present day, been managed in a very homogenous manner with similar investment approaches and very questionable results. The convergence of accounting, regulatory, and market forces is forcing change upon the industry in a way that will impact a broad range of service providers and potential investors, and indeed the underlying company plan sponsors and the very participants they serve. These changes will produce major dislocations and opportunities for asset managers, investment bankers, insurance companies, private equity firms, hedge funds, and a whole array of processing companies. Given the demographics of the aging baby-boomer population and the looming crisis in global retirement funding, this may prove to be a bellwether issue in finance and social policy for the next decade. The changing regulatory and accounting rules that govern defined benefit plans will be reviewed with emphasis on the Pension Protection Act of 2006, FAS 158 (Phases I and II) and the convergence of U.S. and international accounting standards in this arena.