Funding & Hedging Management

We develop funding and hedging strategies customized to each plan sponsor’s financial objectives throughout our consulting process, and then implement and manage these strategies on an ongoing basis.

FUNDING

Corporate-Owned Life Insurance (COLI). On the sponsor’s behalf, we work with insurance carriers to periodically evaluate, restructure and re-price their COLI to improve its financial performance. Further, we proactively manage the investments within the COLI to effectively hedge the plan’s liabilities and minimize tax and expenses. Additionally, we provide a comprehensive array of COLI administration services, including policy administration, financial reporting, and death claim processing.

Mutual Funds or Other Non-COLI Assets. We design and implement portfolios of low cost, tax-efficient investment options. On an ongoing basis, we continue to manage these portfolios through tax-efficient trading protocols, ensuring that assets remain highly correlated with plan liabilities, while minimizing taxable gains.

HEDGING

Total Return Swaps. In many cases, total return swaps (TRS) are a cost-, tax-, and capital-efficient strategy to hedge the market exposures of on-balance-sheet non-qualified benefit plan liabilities. Created and administered by our strategic partner Atlas Financial Partners, a TRS is an effective hedge solution for plan sponsors with unfunded plan liabilities. A TRS can also be an effective hedge solution for plan sponsors who have funded their plans.

CapAcuity provides comprehensive support throughout the process of a plan sponsor’s consideration and adoption of a TRS, including due diligence, implementation, and administration.