Frustrated by the volatility of its contributions to its U.S. defined-benefit pension plan, Thomson Reuters adopted liability-driven investing, moving far more of its assets into fixed-income securities so the performance of the plan's assets would more closely match that of its liabilities.
Over a three-year period starting in 2006, the financial information provider flipped from having 70% of the plan's assets invested in equities and 30% in fixed income, to having 70% in fixed income and 30% in equities and other risk assets.
"We said we were prepared to trade return for less volatility," says Andrew Perrin, vice president of treasury and global head of pensions and investments.
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