They now account for over 34% of all defined benefit plans – up from 2.9% in 2001.
A primary challenge cash balance plans face is protecting against loss of principal.
A low interest rate environment combined with unpredictable and volatile equity markets can be a challenging back drop for managing cash balance plans.
When markets turn bearish, sponsors of cash balance plans don’t have the luxury of waiting it out. Most likely, they will be required to make additional, unplanned contributions to bring the portfolio’s balance back to the required levels.
In 2020, during the market’s fastest drawdown on record, Build’s flagship Conservative strategy – which consists of over 90% fixed income – had a max drawdown of only 6.24%, while many other conservative strategies experienced a drawdown of 15% or more.
Contact the Regional Director in your state to learn what role Build’s investment strategies can play in your cash balance plan.
Build Asset Management, LLC (a/k/a Build and/or Get Building) is a registered investment adviser in the States of Missouri, South Dakota, and Washington. The Adviser may not transact business in states where it is not appropriately registered, excluded or exempted from registration. Individualized responses to persons that involve either the effecting of transactions in securities, or the rendering of personalized investment advice for compensation, will not be made without registration or exemption.