Other Views

  1. Climate change a risk, not an uncertainty

    trueInvestors should no longer categorize the climate change issue as uncertainty, that is, an issue whose impacts can't be quantified. Rather it should be categorized as a risk, in which impacts, particularly of government intervention, can be estimated.

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  1. A blueprint for making the 'smartest beta' portfolio

    trueThere is a debate as to whether changing the weight methodology of a market index is really active management or an alpha strategy, rather than a beta strategy or discipline.

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  2. Promise now, pay later

    trueWhen a California judge ruled in October that the city of Stockton could exit bankruptcy protection without cutting its public-sector retirement obligations, the decision drew the ire of creditors and highlighted the outsized role public pensions play in municipal finance.

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  3. The SEC's "broken windows' strategy is misguided

    trueThe Securities and Exchange Commission is unfortunately pursuing a fundamentally flawed strategy to police the capital markets and protect investors.

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  4. The coming crunch for pension plans: Derisking despite supply, low-rate issues

    trueMany U.S. corporate defined benefit plans have engaged in strategies to narrow the mismatch between the interest rate sensitivity of their assets and liabilities. However, executives of many plans are waiting to take action. We believe three factors will conspire to put pressure on them.

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  5. Everyone is focusing on the wrong goal in retirement planning

    trueRobert C. Merton, 1997 Nobel laureate, wrote in the July-August issue of Harvard Business Review: “The seeds of an investment crisis have been sown. The only way to avoid a catastrophe is for plan participants, professionals and regulators to shift the mindset and metrics from asset value to ...

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  6. Fiduciary concerns, complexities with the SEC's pay-to-play rule

    trueThe Securities and Exchange Commission's recent announcement of its first enforcement action under the “pay-to-play” rule it adopted in 2010 demands the attention of those responsible for governmental retirement plans to understand the regulation and its implications in order to secure the maximum ...

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  7. Target-date fund outcomes expose fiduciaries to risk

    trueTDFs are often black boxes, so many fiduciaries don't realize they do not have a rigorous conceptual basis — as demonstrated by the dramatic variation in the returns and asset allocations of funds with the same target date.

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  8. The market is ready for proxy access

    trueIt is time for the Securities and Exchange Commission to propose proxy access again.  

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  9. For ERISA to have a future, return it to its roots

    trueForty years ago, President Ford signed the Employee Retirement Income Security Act into law. It's hard to conceive now, but ERISA was crafted by both Democrats and Republicans with support from both business and labor. Since then, it's protected the pensions of tens of millions.

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  10. Challenges from 401(k) fiduciary breaches litigation

    trueWith ERISA entering its 41st year, commentators highlighting the landmark legislation's successes and failures have paid little attention to the newfound focus on fiduciary responsibility resulting from an increase in litigation from alleged fiduciary breaches, particularly in 401(k) defined ...

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  11. Embracing risk: Perils of aversion and misdefinition

    trueThe investment community is developing a strong aversion to risk at the institutional levels - with serious consequences.

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  12. Canada offers lessons for CalPERS, other U.S. funds

    trueI was a member of a task force created in the late 1980s by the government of Ontario to recommend how the province's public-sector pension plans might be restructured for better performance.

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  13. Kick-starting an internal risk-management dialogue

    trueConventional risk management efforts are often designed to manage risk when conditions are considered normal or in a business-as-usual environment, but not during extremes, which is when risk management is most needed.

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