The primary measure of the health of a pension plan is its funded status, which is the difference between the market value of the assets and the present value of the liability. As such, many plans measure and monitor risk in terms of the volatility of the plan’s funded status, as opposed to the volatility of the assets in isolation. This has implications for the investment strategy. A Liability Driven Investment (“LDI”) strategy measures risk in the context of the asset’s ability to meet future benefit obligations. This article identifies the risk factors that affect pension funded status, describes a framework for managing those risks, and presents considerations for designing a strategy appropriate for your plan.