NEPC, which consults for more than 100 pension sponsors with total assets of about $230 billion, recently announced it has adopted the PFaroe platform, joining a list of other pension consultant firms that includes Callan, Northern Trust, Transamerica, and Natixis.

“Sponsors were once just concerned about how they were doing against peers,” said Svendsen.

The Pension Protection Act of 2006 changed that, he explained, shifting the focus from peer benchmarking to how funding obligations were affecting a given company’s financials.

That, in turn, encouraged wider adoption of liability-driven investment strategies. Instead of simply managing a portfolio based on annual returns, LDI centers the focus on managing the cash needed to meet future obligations to workers.

With the shift to liability-driven strategies came the need for more timely valuations of plan assets and liabilities.

About 75 percent of NEPC’s defined benefit pension clients have implemented a liability-driven strategy, according to a company release. Since 2011, about 75 percent have also developed a customized asset allocation glide path, allowing sponsors to remove equity risk from portfolios when the plans hit a certain funding level.

With PFaroe, the platform’s daily tracking capability allows sponsors to make more timely asset allocation changes when appropriate, said Svendsen.

That need for timely monitoring and transparency has accentuated as the pension risk transfer market has grown to record levels.

Pension buyout sales totaled $3.8 billion in the second quarter of 2015, a record for that period, according to LIMRA Secure Retirement Institute.

There were 62 buyout deals inked in that quarter, which historically has been a slower period for de-risking—most activity tends to happen in the fourth quarter, according to LIMRA.

Another study from Mercer says that half of defined benefit pension sponsors will be considering some form of annuitized de-risking strategy in the next two years.

Svendsen says tools like PFaroe, which not only give daily valuations, but also cash flow projections, and the ability to forecast alternative investment strategies, can give sponsors an edge in the effort to improve funding status, particularly if they have an eye on one day annuitizing pension risk.

When funding status improves, so do a sponsor’s options in the annuity market.

“I wouldn’t say that every plan is looking to someday move to transfer pension risk to insurance companies, but I think all plan sponsors are working to better understand what their options are,” said Svendsen.

Svendsen isn’t sure what percentage of NEPC’s client-base will take advantage of the new technology right away. As is, the sponsors that do monitor plan assets daily are the exception, he said.

“A lot of sponsors, especially of smaller plans, are comfortable operating as they are,” explained Svendsen. “Some plans don’t have the internal manpower to monitor investments and execute changes on a daily basis.”

That said, he thinks the future trend will be toward more daily monitoring.

“I expect some sponsors will use the service simply for the benefits it gives to more frequent and transparent internal reporting,” he added.

And more sponsors will certainly need daily monitoring capability if they are on a course to de-risk their plan via a pension buyout.

“Monitoring your plan’s glide path on a daily basis gives a sponsor more options, especially if they are looking to de-risk their plan,” said Svendsen.

The new technology will come at a cost, though NEPC is still in the process of factoring what it will be. The technology will reside with NEPC, which is to say sponsors won’t have direct access to it. Rather, NEPC will mine the platform and send the daily analytics to sponsor clients.