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Manage assets and liabilities in a coherent manner

ALM for pension funds

Ortec Finance is a worldwide leading Asset Liability Management (ALM) provider for pension funds. As an independent specialist, Ortec Finance offers a complete and consistent ALM simulation software (GLASS) for modelling pension liabilities, asset classes, investment and contribution policies, and economic scenarios. An ALM analysis aims to improve understanding of the pension dynamics to support the strategic decision making, in order to reach the objectives of the fund.

Ortec Finance offers ALM both by means of software and as a service. The ALM software (GLASS) enable pension plans to get in control of the strategic decisions in-house. Alternatively, the service model provides access to highly skilled consultants and reporting services. Our solutions cover all kinds of pension plans, e.g. Defined Benefit, Defined Contribution (DC), Collective DC and Individual DC.

Pension funds need to manage their balance sheet effectively, in order to make good on their pension promise. They must identify the major risk sources and gain insight in the impact on future pensions, contributions and funded ratio. Based on the insight that ALM analysis provides, senior management and trustees can formulate a strategic policy that aims to achieve the strategic objectives reflecting the interests and risk appetite of all stakeholders. In addition, ALM analysis could support the (corporate) sponsor to grasp the financial consequences of maintaining a pension plan, or the impact of mergers and acquisitions, and provide the basis for clear and open communication with individual members.

Strategic uses of ALM analyses

The outcome of an ALM excercise is a strategic policy framework, being an integrated (dynamic) investment, contribution and indexation policy, taking into account the relevant regulatory requirements. It is also possible to use an ALM analysis to support a more detailed specification of a policy instrument, such as an investment policy analysis to address various allocation and hedging strategies, new and alternative asset classes, leverage, derivatives, life cycle or target date funds, and more.

A specification of the strategic policy of the pension fund refers to the first steps of the Strategic Risk Management framework. Over time, changes in financial position or market circumstances will affect feasibility of strategic objectives and the risk budget. This requires continuous evaluation of the strategy referred to as Strategic Risk Management. For this purpose, Ortec Finance offers a consistent ALM simulation model (GLASS), which replicates integrated long and short-term risks and returns.

ALM studies provide insight in order for senior management and trustees to formulate a strategic policy that aims to achieve strategic objectives reflecting the interests and risk appetite of all stakeholders.

ALM analysis provides the basis for clear and open communication with members.

Key Characteristics of Ortec Finance

Experienced global service provider    

  • Leading ALM provider for pension funds around the world
  • Extensive possibilities for investment strategy analysis, including derivatives (overlays), private asset classes, life cycle or target date funds, and more
  • Expertise in configuring specific pension scheme and valuation rules
  • Multinational approach enables to aggregate plans with differences in currency, accounting standards (IFRS, IAS, US GAAP and FRS) and regulatory requirements (nFTK, MFR, TLS, etc.)

Thorough Risk Assessment

  • Monthly and annual simulations support the complete Strategic Risk Management framework for long and short term strategy formulation and evaluation in a consistent way
  • One of a kind economic scenario generator (DSG) and Ortec Finance Scenario set (OFS) with a worldwide coverage of more than 600 economic variables and benchmarks

Client-centric

  • Sophisticated software and strategic pension advise, based on three decades of experience with our world-wide client base

 

GLASS

GLASS is an asset and liability scenario solution that improves financial decision making by simulating the short and long-term effects of strategic investment decisions.