NORTHERN TRUST 
By Liability benchmarks are an alternative to standard market indexes, which represent a collection of securities that are used to evaluate the performance of traditional investment strategies. Northern Trust's liability benchmarks are customized to each client's unique cash flow profile, which is obtained from the client or the plan's actuary. This service also provides the client with flexible modeling options, such as the selection of an appropriate discount curve or multiple cash flow profile scenarios. Using the custom benchmark, plan sponsors can match the performance of actual assets versus liabilities and evaluate the impact of an LDI strategy on the plan's surplus or deficit.
"Liability benchmarking provides a new scorecard for plan sponsors to measure overall performance," said Paul d'Ouville, global director of Investment Risk and Analytical Services at Northern Trust. "In an LDI framework, our clients are focusing on the liability side of the equation like never before. Pension plans exist for the purpose of providing benefits to participants, so the performance of assets relative to a plan's liabilities is the key to measuring its ongoing viability. While indices are available to benchmark the average pension plan liability, Northern Trust believes there is no substitute for using the plan's own unique liability structure to understand the inherent risk plan sponsors face in their own plan."
Northern Trust currently offers this service to institutional plan sponsors. Development is under way to produce a Web-based application which will provide clients the ability to view performance and analytics of their liabilities, including the impact of different interest rate scenarios on the value of the liabilities.
As a part of its client focus philosophy, Northern Trust has provided risk and performance services for over three decades. Northern Trust's Investment Risk & Analytical Services capabilities include risk monitoring and measurement, performance evaluation and other specialty services, with continuing investment in research and client-focused product development.
About Northern Trust
Northern Trust Corporation (Nasdaq: NTRS) is a leading provider of
investment management, asset and fund administration, fiduciary and banking
solutions for corporations, institutions and affluent individuals worldwide.
Northern Trust, a multibank holding company based in
SOURCE Northern Trust Corporation
