Consultant Urges Review of Pension Operating Model

The report points out that pension funds and endowments are no longer able to operate under old models, and must transition to the industry standard investment manager operating model used by many retail and institutional investment advisers. This transformation will have an impact throughout the pension fund’s organization—from the investment committee to the plan’s participants.  

Beacon explained that pension funds continue to experience a period of unprecedented transformation. A number of factors such as budget cuts, volatile financial markets, and increasing scrutiny by stakeholders have contributed to pension organizations reevaluating their operating environments and external relationships.   

“Pension fund managers may be assuming unnecessary risk and missing out on cost savings if they have not recently reviewed and streamlined their operating model,” said Frank Strauss, principal at Beacon. “An operational review allows investment managers to simultaneously achieve two critical goals: manage operational risk and reduce costs.”