Pensions and Retirement Training Course on Liability-Driven Investment (LDI)
Master Pensions Retirement Training with expert training. 10 Days course with certification. Comprehensive training program. Online & in-person. Enroll now!
Pensions And Retirement Courses10 DaysCertificate Included
Duration
10 Days
Mode
Online & Physical
Certificate
Included
Language
English
Course Overview
This training program equips pension fund professionals with the strategic, analytical, and practical skills needed to design and implement Liability-Driven Investment (LDI) frameworks. The course explores how pension funds can align their asset allocation strategies with their liability profiles, manage interest rate and inflation risks, and ensure long-term funding sustainability. Participants will learn about duration matching, derivative strategies, risk management, portfolio optimization, and governance structures for effective LDI implementation.
Secure enrollment • Professional certificate included
Learning Objectives
By the end of this training, participants will be able to:
Understand the principles, objectives, and evolution of LDI strategies.
Analyze the structure and behavior of pension fund liabilities.
Identify and manage key liability risks such as interest rate and inflation exposure.
Apply duration matching and hedging techniques to mitigate liability risk.
Integrate LDI into overall asset allocation and investment policy frameworks.
Utilize derivative instruments to achieve efficient risk management.
Evaluate funding ratios, solvency metrics, and performance under LDI frameworks.
Implement governance, monitoring, and reporting systems for LDI programs.
Incorporate ESG and sustainability factors into LDI strategies.
Develop customized LDI solutions for defined benefit (DB) pension schemes.
Course Content
Module 1: Introduction to Liability-Driven Investment (LDI) Evolution and rationale for LDI in pension management Traditional vs. LDI investment approaches Funding ratio concepts and liability sensitivity Key components of LDI frameworks: liabilities, hedging, and growth assets Global trends and adoption of LDI among pension schemes Case study: Implementation of LDI in leading pension funds Module 2: Understanding Pension Fund Liabilities Structure of defined benefit (DB) pension liabilities Discount rates, duration, and convexity explained Actuarial assumptions and liability valuation methods Impact of inflation, interest rates, and longevity on liabilities Liability projections and scenario modeling Workshop: Calculating the duration of a pension liability stream Module 3: Asset-Liability Matching Concepts The importance of matching assets with long-term liabilities Asset-liability correlation and mismatch analysis Duration matching vs. cash-flow matching Surplus optimization and funding risk management Case study: Comparing static and dynamic asset-liability matching approaches Module 4: LDI Strategy Design and Implementation Steps in developing an LDI strategy Strategic vs. tactical LDI approaches Defining hedging ratios and coverage levels Selecting appropriate hedging instruments Integrating LDI within broader investment policies Workshop: Designing an LDI implementation plan Module 5: Fixed Income Instruments in LDI Role of government and corporate bonds in LDI portfolios Inflation-linked bonds and liability protection Credit risk considerations in fixed income selection Yield curve management and duration targeting Building a bond portfolio for LDI purposes Simulation: Constructing an LDI bond portfolio Module 6: Derivatives and Hedging Techniques Using derivatives to manage interest rate and inflation risk Interest rate swaps, futures, options, and swaptions explained Collateral management and counterparty risk Leverage, liquidity, and regulatory issues in derivatives use Synthetic replication of long-duration exposure Workshop: Applying derivatives for liability hedging Module 7: Risk Management and Performance Measurement Key LDI risks: interest rate, inflation, funding, and operational risks Stress testing and scenario analysis Measuring LDI performance: funding ratio volatility and tracking error Attribution analysis and reporting metrics Building a robust risk management and governance framework Practical exercise: Monitoring LDI performance through KPIs Module 8: Integrating Growth Assets and Return-Seeking Portfolios Balancing hedging assets and growth assets Role of equities, alternatives, and private assets in LDI structures Dynamic de-risking and glide path strategies Rebalancing frameworks and trigger-based allocation models ESG integration in return-seeking assets within LDI Case study: Hybrid LDI portfolio construction Module 9: Governance, Regulation, and Reporting Governance roles and responsibilities in LDI oversight Regulatory frameworks and solvency requirements Reporting to trustees, regulators, and beneficiaries Communication of complex LDI strategies to stakeholders Fiduciary and ethical considerations in LDI management Workshop: Building an LDI governance policy document Module 10: Practical Application and Strategic Outlook End-to-end design of an LDI framework for a sample pension fund Reviewing success factors and pitfalls in LDI implementation Future trends: longevity hedging, ESG integration, and digital analytics Technology tools for LDI modeling and monitoring Capstone project: Developing a customized LDI strategy and implementation roadmap
Who Should Attend
Pension fund managers, actuaries, investment analysts, trustees, risk officers, portfolio managers, regulators, and policymakers involved in pension fund strategy, asset-liability management, and risk control.
