Products March 16, 2017

Lockton Adopts Analytics Platform for Pension Plans

The PFaroe system uses real-time data and projection models to analyze and manage risk.

Reported by

Retirement consulting services provider Lockton Companies has adopted PFaroe, a Web-based platform that will aim to help the firm’s Retirement Services division analyze clients’ pension plans and optimize assets and liabilities to strategically manage plan risk. PFaroe will also allow Lockton to analyze potential scenarios that measure the impact of changing economic assumptions and market conditions, as well as model alternate asset-allocation strategies.

“Pension benefit obligations remain a significant risk to many plan sponsors,” explains Pam Devling, vice president and consulting actuary at Lockton. “Our approach to retirement consulting must be very holistic; looking not just at investments and liabilities on a standalone basis, but also at their interaction and how they may be affected by plan sponsor decisions or market movements. PFaroe’s real-time insights and detailed projection models will be of tremendous value to our clients’ plan design and risk transfer decisions.”

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Matthew Seymour, CEO, RiskFirst, says: “The evolution of the pensions market in the US – whether this be through liability-driven investing or de-risking strategies – is making the ability to have real-time data across assets and liabilities vital. We are delighted that Lockton is using PFaroe to ensure that their clients have access to these important analytics in their own toolbox as they head toward their own end-games.”

Lockton Companies is a global provider of risk management, employee benefits, and retirement consulting services. PFaroe is a product of RiskFirst, a financial technology business that offers risk analytics and reporting.

Investing March 16, 2017

Investors Return to Prime Money Market Funds

Money market fund regulation previously led to investor demand for government funds.
Reported by

Long-term mutual funds and exchange-traded products (ETPs) experienced net deposits of $79.4 billion in February, an increase from the $58 billion in net new flows seen in January, according to Strategic Insight, parent company of PLANSPONSOR.

Passive strategies continued to lead demand among long-term funds with inflows of $65.6 billion (including $43.5 billion to ETPs). Active long-term funds reversed the aggregate outflows they had experienced in recent months with net deposits of $13.8 billion in February, compared to $13.8 billion in net redemptions in January.

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Taxable Bonds experienced the highest net deposits among long-term funds at $37.6 billion. Taxable Bond funds experienced net inflows across both passive ($17.8 billion) and active ($19.8 billion) funds. Tax-Free Bond funds experienced minor inflows of $2.1 billion in February.

Domestic Equity led among Equity funds in February and saw a significant improvement in net deposits at $24.6 billion, compared to $5.4 billion in January. International Equity funds experienced a similar level of net deposits last month, seeing $15.1 billion in February and $15.3 billion in January. Among Domestic Equity funds, outflows were concentrated in active products ($9.1 billion), while International Equity funds saw net inflows across both passive ($14.2 billion) and active ($864 million) segments.

Money Market funds continued to experience net redemptions in February, but at a more favorable level of $2.0 billion compared to $44.6 billion of outflows in January. Among Taxable Money Market funds, prime funds led inflows at $9.9 billion, while treasury and government funds saw outflows of $4.5 billion and $7 billion, respectively. Bifurcation in demand within this space had previously favored government funds, driven by money market fund regulation.

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