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Portfolio > Portfolio Construction

MassMutual Introduces Pension Scorecard to Compare LDI, Traditional Portfolios

By Danielle Andrus

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MassMutual announced Tuesday that it had launched a pension funding scorecard that allowed its defined-benefit plan sponsors and advisors to compare the quarter-by-quarter performance of a liability-driven investing portfolio with a traditional 60% equity/40% fixed income portfolio. Both portfolios are compared with the MassMutual Pension Liability Index, which is based on aggregating data from defined-benefit plans on MassMutual’s Retirement Services platform.

“We are seeing a clear trend among pension plan decision-makers to take a closer look at pension funding volatility. LDI can provide a more predictable approach to managing pension plan assets and liabilities,” Marc Condon, assistant vice president and actuary for MassMutual’s Retirement Services Division, said in a statement. “The Pension Funding Scorecard provides a detailed picture of how well LDI portfolios have tracked pension liabilities compared to traditional 60/40 portfolios.”

In addition to historical returns, the scorecard will also provide definitions of common terms and answers to frequently asked questions about liability-driven investing.

On Wednesday, MassMutual announced that it has launched a new multi-asset fund that combines investment types from across the risk/return spectrum. The MassMutual Barings Dynamic Allocation Fund includes stocks and bonds from developed and emerging economies, real estate and commodities.

The fund is managed by Baring International Investment Limited, a London-based affiliate of MassMutual with over $12 billion in assets under management.

“Markets may deliver returns unevenly through the business cycle, so a multi-asset approach can be effective in helping balance risk and return for investors, with reduced volatility, through a combination of strategic and tactical asset allocation,” Mike Eldredge, vice president of investment management for MassMutual’s Retirement Services Division, said in a statement. “The flexibility of this approach may make this Fund suitable for those seeking active management of their asset allocation holding with the goal of real returns.”

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