Lack of Pension Staff a Barrier For LDI

Cole: many pension funds don't have enough in-house expertise.

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Jim ColeLiability-driven investing (LDI) has been a tough sell in Canada according to some delegates at the 2011 Risk Management Conference in Muskoka, Ontario – but that doesn’t mean LDI strategies are on the wane. According to one of our speakers, Jim Cole, vice-president, Phillips, Hager & North Investment Management Ltd, plan sponsors now accept that LDI approaches are here. However, they do face a couple of big challenges when it comes to implementation.

We interviewed Cole during the conference and he pointed out that small- to mid-sized plans have a hard time embracing LDI simply because many plans don’t have full-time dedicated investment staff. Since these strategies are complex, a lack of expertise in-house makes it difficult to adopt the management and processes needed to make them work.

Watch the entire interview with Cole by clicking on the image and going to BCTV.

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