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In establishing guidelines and investment objectives, it is very important to review not only the assets of the plan, but the liabilities as well. Pension Fund Evaluations, Inc. would work closely with the actuarial firm to determine the Plan's funding status, number of current members, average age, etc. It is important to take advantage of strong employment, while conversely it is important to properly structure the asset mix in a Plan with declining employment and/or an under funded status. It is Pension Fund Evaluations, Inc.'s practice to work closely with the Fund Trustees, Administrator and Legal Counsel in the drafting of guidelines. Guidelines are reviewed annually to ascertain if any changes are necessary.
It is difficult to predict which asset class will perform best in a given year. Thus, although it is psychologically appealing to try to predict the "best" asset, proponents of asset allocation consider it risky. A fundamental justification for asset allocation is the notion that different asset classes offer returns that are not perfectly correlated. Different asset allocations will provide differerent amounts of risk and therefore return, any allocation has the abiltity to loose money and therefore should be chosen prudently. We will work with clients to assist them in choosing an allocation which will help them meet both of these objectives.
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