SM(2): Segment matching and surplus management


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Milliman's Segment Matching and Surplus Management, or SM(2), is an investment policy development tool that can help minimize pension plan funded status volatility and contribution volatility. SM(2) provides asset investment strategies based on an analysis of pension assets and liabilities.

Built from the ground up specifically to meet Pension Protection Act and Financial Accounting Standards requirements, SM(2) is a liability-driven investment process that provides comprehensive risk management by coordinating investment policy (segment matching) with funding policy (surplus management). The tool utilizes holding dollar bonds, not derivatives or swaps.

SM(2) is easy to implement and gives plan sponsors a fast, convenient way to monitor the success of their pension investment strategies. It may also be used in conjunction with Milliman's Pension Performance Dashboard, a reporting tool that provides real-time updates on plan financial status and tracks the success of asset investment policies.

View LDI sample report exhibits. 

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