Standard Life's target liability bond funds attract initial investment of $50 million

Standard Life's target liability bond funds attract initial investment of $50 
million 
Simplified solution helps small and medium-sized defined benefit pension plans 
manage interest rate risk 
MONTREAL, Feb. 4, 2013 /CNW Telbec/ - The Standard Life Assurance Company of 
Canada ("Standard Life") announced today that its target liability bond funds 
have attracted just under $50 million in initial investments from three 
existing clients, including CCH Canadian Limited and CYTEC Canada Inc. These 
funds are designed to respond to the needs of defined benefit (DB) pension 
plans to de-risk their portfolios. They leverage the expertise and 
quantitative research capabilities of Standard Life Investments Inc., an 
affiliated company of Standard Life, which introduced a liability-driven 
investment (LDI) solution for large pension plans in 1998. 
LDI solutions represent a clear departure from the traditional, balanced 
approach for managing DB pension plans that focuses on the return of assets, 
but ignores the interest rate risk inherent to liabilities which is critical 
to long-term pension plan solvency. Standard Life's new solution is 
particularly attractive to small and medium-sized pension plans whose 
financial resources would not normally allow them to access the sophisticated 
options they need to meet existing and anticipated liabilities. 
"Whether they are large or small, times have changed for DB pension plans," 
says Michel Fortin, Senior Vice-President, Marketing and Customer Solutions. 
"Many plans are approaching maturity and, as pressures on solvency mount due 
to historically low interest rates, a new way of thinking is required to 
ensure plan sponsors meet payout obligations. Our liability-driven investment 
framework offers an innovative and more effective solution to manage interest 
rate risk without sacrificing growth potential." 
Standard Life's simplified LDI solution is a series of long, mid and 
short-term liability government bond funds that corresponds to specific 
Canadian pension plan profiles representing different combinations of active 
and retired employees at three stages (young, mature and retired) of the 
pension plan life cycle: 


    --  Long-term liability government bond fund: demographic profile
        with a majority of active employees; duration of 18 years.
    --  Mid-term liability government bond fund: demographic profile
        with a majority of retirees; duration of 13 years.
    --  Short-term liability government bond fund: demographic profile
        of 100% retirees; duration of 7 years.

Plan sponsors can allocate assets between the three funds and base investment 
decisions on the percentage of liabilities associated with active and retired 
plan members, on the duration of liabilities or on expected cash flows.

Investment management fees for Standard Life's new target liability bond funds 
are lower than actively managed traditional bond funds. The new funds are 
managed by Standard Life Investments Inc.

About Standard Life

Standard Life plc is a leading long-term savings and investment company 
headquartered in Edinburgh, Scotland. Standard Life has around six million 
customers worldwide and operates in the United Kingdom, Europe, North America 
and Asia, and globally with Standard Life Investments Ltd.

In Canada, Standard Life has been doing business for almost 180 years. It 
operates under Standard Life Financial Inc., which wholly owns The Standard 
Life Assurance Company of Canada and Standard Life Mutual Funds Ltd. It is 
Standard Life plc's largest operation outside the UK with about 2,000 
employees. It provides long-term savings, investment and insurance solutions 
to more than 1.4 million Canadians, including group retirement and insurance 
plan members.

As of September 30, 2012, Standard Life plc had C$337 billion in assets under 
administration, including C$44 billion in Canada through Standard Life 
Financial.

Geoffrey King 514-499-7999, ext. 8150 Geoffrey.king@standardlife.ca

SOURCE: STANDARD LIFE

To view this news release in HTML formatting, please use the following URL: 
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CO: STANDARD LIFE
ST: Quebec
NI: INS 

-0- Feb/04/2013 15:00 GMT


 
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