2017 Industry Innovation Awards

Corporate Defined Benefit Pension Plan Above $5 Billion

ABB Group

Elisabeth Bourqui, Head of Pension Management
(Zurich, Switzerland)

Art by Chris Buzelli

Zurich-based ABB is one of the largest engineering companies in the world. Because of its global presence, the company also has a global population of pension plan participants, which means Elisabeth Bourqui, ABB’s head of pension management, is tasked with overseeing plans spread across the globe.

Bourqui has taken a digital approach to managing the plans, creating a vast online infrastructure that allows the finance team to perform risk assessments, financial modeling, and asset analysis on 100 defined benefit and about 50 defined contribution plans from Zurich. The digital infrastructure also gives the team the ability to make sure that plan structures and asset allocations meet local compliance requirements across all jurisdictions in which ABB has a presence.

“Our digital approach permits dynamic asset allocation,” Bourqui says, by way of explaining how technology is critical to ABB’s innovative pension management process.

By putting every plan on the same technology platform, Bourqui and her team have also been able to ensure a consistency in the analysis process that she says has been helpful in making sure that plans reflect the unique needs of their local constituents, while offering global insights to the pension team.

“Our small and lean team performs all pension management and investment processes together with the Boards of Trustees,” she says. “That would not be possible without this infrastructure.”

In addition to consistency, the ability to perform global financial modeling and monitoring for all of ABB’s pension plans gives the finance team key insights that are critical for dynamic asset allocation. As a result, ABB’s multi-asset pension portfolio has achieved a total return of 24.63% over the last four years—beating many top-quartile multi-asset funds in the market today.

“We have an outstanding dynamic asset allocation process that has brought 1% of additional performance on top of the strategic asset allocation and, most importantly, a balance sheet risk reduction at the same time,” Bourqui says.

The additional performance has also helped ABB power through a low-interest rate environment. For Bourqui, being able to maintain double-digit returns in a low-rate environment has helped her manage long-term liabilities as well as medium-term return goals. “We believe our investment process is cutting edge in terms of current technology available,” she says.

Bourqui credits her technology partners with helping ABB achieve top performance. “We have been a long-term and leading partner with Ortec Finance system on this digital infrastructure development,” she explains. “We are able to use robust data analytics systems and artificial intelligence backtesting to better understand our model and scenario projections.”

Bourqui adds that adopting new technologies like big data analytics and artificial intelligence systems should be a consideration for other pensions, and can be helpful when presenting to the board.

“Our Boards of Trustees appreciate the ability to analyze long-term and medium-term decisions on a strategic asset allocation,” she says. “The digital approach allows us to be agile and effective, and raise our discussions to the next level.”

Corporate Defined Benefit Pension Plan Above $5 Billion Finalists

  1. Lockheed Martin ­Investment Management Company
    Christopher Li
  2. Raytheon
    Sanjay Chawla
  3. Delta Air Lines
    Jonathan Glidden
  4. Eli Lilly
    Susan Ridlen
  5. Boeing
    Andrew "Andy" Ward
  • Kim LewFoundation
  • Tom JoyEndowment
  • Brian ReedCorporate Defined Benefit Pension Plan Below $5 Billion
  • Elisabeth BourquiCorporate Defined Benefit Pension Plan Above $5 Billion
  • Matt ClarkPublic Defined Benefit Plan Below $15 Billion
  • Vijoy ChattergyPublic Defined Benefit Plan ($15 Billion - $100 Billion)
  • Scott EvansPublic Defined Benefit Plan Above $100 Billion
  • David HolmgrenHealthcare
  • Bob WatsonDefined Contribution
  • Raphael ArndtSovereign Wealth Fund
  • Jagdeep BachherESG
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