Goldman Sachs Asset Management (GSAM) has issued a Q&A document
about the effects on defined benefit plans of the U.S. corporate tax
reforms, written by Mike Moran, Chief Pensions Strategist at GSAM.
Titled, Does a Borrow-to-Fund and De-Risk Strategy Still Make Sense?, the document answers questions such as:
rates may be rising. Corporate tax rates may be falling. Foreign-held
cash may be more accessible. Does it still make sense for corporate DB
plan sponsors to consider a borrow-to-fund and de-risk strategy?
interest rates have risen about 100 bps since summer 2016. If interest
rates are expected to continue to rise, should a plan sponsor just wait
for that to occur, which would help to cure deficits?
The full Q&A may be found on GSAM’s website