Asset Allocation for Defined Benefit Plans

August Baker, Dennis E. Logue and Jack S. Rader

in Managing Pension and Retirement Plans

Published in print November 2004 | ISBN: 9780195165906
Published online July 2005 | e-ISBN: 9780199835508 | DOI:
 Asset Allocation for Defined Benefit Plans

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This chapter begins by defining the strategic asset allocation decision and discussing how the strategic asset allocation should be set. It introduces the factors that should be considered in setting the defined benefit (DB) strategic asset allocation. Theoretical arguments favoring allocations to stocks and bonds are considered, followed by empirical evidence that shows what pension funds actually do. Finally, the allocation of DB assets over time is discussed.

Keywords: asset allocation; defined benefit plans; pension plans; investment portfolio; funding; liability

Chapter.  13079 words. 

Subjects: Financial Markets

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