In explaining how a pension fund should transition to a liability-driven investment strategy, Duane Rocheleau, managing director of Northern Trust’s global investment solutions team, writes in “Implementing LDI in Pension Plans,” January 2007 http://www.ntrs.com/pointofview/07_Jan/

implementing-ldi-pension-plans.html:

“1. Analyze and characterize the liabilities; 2. Quantify the relationship between the assets and liabilities; 3. Develop and implement appropriate investment strategies; 4. Monitor the account, rebalance the assets and liabilities mix and tweak the investment strategy as necessary.”

Describe each of the above elements.