Liability Benchmarks As pension plan investment strategies move down glide paths and more precisely hedge plan liabilities, it is common to consider a liability benchmark. We believe each plan sponsor should determine if a liability benchmark aligns with their specific circumstances and objectives. We can help guide plan sponsors through the benefits and limitations of a liability benchmark and help lead to them to a framework designed to best meet their objectives. For those embarking upon this structure, our actuarial and quantitative expertise allows us to re-engineer and decompose a wide range of liability discount curves so that our portfolio management teams can deliver a customized liability benchmark solution. WHY CHOOSE A LIABILITY BENCHMARK?It can offer appropriate representation of the ultimate objectiveEvolves with liabilities over timeTransfers ownership of liability "headwinds" to the managerCan help stakeholders to understand the drivers of funded statusTypically an appropriate fit for plans advancing in their glide path POSSIBLE CHALLENGESNot an investable benchmarkHigh hurdles to match the liability due to downgrade "headwinds"Lack of industry standard discount curveBenchmark is not transparent and requires specialized attribution WHY CHOOSE A LIABILITY BENCHMARK?Appropriate representation of the ultimate objectiveEvolves with liabilities over timeTransfers ownership of liability "headwinds" to the managerAllows stakeholders to better understand the drivers of funded statusTypically a good fit for plans advancing in their glide path AMONG POSSIBLE CHALLENGESNot an investable benchmarkHigher hurdle to match the liability due to downgrade "headwinds"No industry standard discount curveBenchmark is not transparent and requires specialized attribution The ability of an actual portfolio to deliver the required cash flows is not guaranteed and is subject to a variety of factors including, but not limited to, the availability of bonds, active management and trading, transaction costs, default risk, reinvestment risk, rebalancing risk and liquidity risk. Commodity, interest and derivative trading involves substantial risk of loss. Any investment that has the possibility for profits also has the possibility of losses. This is for informational purposes only and should not be construed as investment advice. Investment decisions should consider the individual circumstances of the particular investor. Any opinions or forecasts contained herein reflect subjective judgments and assumptions of the author and do not necessarily reflect the views of Loomis, Sayles & Company, L. P. Investment recommendations may be inconsistent with these opinions. There can be no assurance that developments will transpire as forecasted. Examples and analysis are provided for illustrative purposes only and do not represent actual accounts. Accuracy of data is not guaranteed but represents our best judgment and can be derived from a variety of sources. Opinions are subject to change at any time without notice.