Health & Welfare (H&W) funds subject to ERISA have the same legal requirements as large pension and annuity funds for performance monitoring. Yet, they rarely get the same attention despite how critical they are to health care security for millions of beneficiaries across the US.
Even though H&W funds are not "return oriented" like pension funds, proper investing can have a material impact on a H&W fund's long-term sustainability in providing quality benefits without having to constantly increase contribution rates.
Following the 2008 GFC and ZIRP (Zero Interest Rate Policy,) many H&W funds became more complex seeking higher returns. They were practically forced to invest more aggressively to keep up with heath care inflation. Despite this shift, for monitoring purposes, many H&W funds maintained the pre-2008 mindset.
As a result of greater complexity and more risk, many H&W funds suffered double-digit losses in 2022 but did not nearly make a full recovery in 2023. Greater complexity and risk require greater monitoring.
No matter how complex or simple an investment strategy, there remains only 5 skills where an investment consultant or OCIO can create or lose value. Those are:
Strategic Asset Allocation
Tactical Asset Allocation
Rebalancing
Active Manager Hiring
Active Manager Firing
In a report of less than 10 pages, H&W funds will gain the prudent due diligence, proactive legal protections, and actionable insights to improve future outcomes.
Contact OCIO Monitor at admin@OCIOmonitor.com to learn more about this service, request a virtual presentation, or preview a sample report.
コメント