AA with real world constraints

Question 1

TAA done at asset class level and is an asset only approach , why ?

Answer 1

because in short term not care about liability

Question 2

De-risking

Answer 2

There has been much discussion globally of pension plans “de-risking”—moving toward larger fixed income allocations to better hedge liabilities, thereby reducing contribution uncertainty. Some countries’ accounting rules, however—most notably those in the
United States—discourage companies from moving in that direction. Under US GAAP accounting rules, for example, a higher allocation to equities allows the plan sponsor to employ a higher return assumption, thereby reducing pension cost, a non-cash expense that directly affects reported income.

Question 3

what kind of asset classes that minimize cash contribution ?
A. Global equities
B. Global high-yield bonds
C. Global intermediate-term bonds
D. Private real estate equity & hedge fund strategy

Answer 3

D. Private real estate equity