Cashflow shortages - the implications

clock

As schemes mature, it's more likely that they will become forced sellers of assets irrespective of how well funded they may be. Understand and plan your cashflow requirements or you might get bitten!

It has been reported recently that half of local authority schemes risk having a cashflow shortfall. However, this is an issue for consideration by most private sector pension schemes as well. As schemes mature, the higher monthly benefit payments and reduced contribution income from those accruing benefits inevitably makes it more likely that schemes will become forced sellers of assets irrespective of how well funded they may be.

This is a significant point. Imagine the scenario where a scheme is fully funded on a scheme funding basis but finds itself cashflow negative and expects to remain so for some time.  There are two options…

To read the rest of the blog click here:
http://www.woollysblog.com/cashflow-shortages---the-implications.aspx?utm_source=ppe&utm_medium=extcommvp&utm_campaign=blog

More on Industry

PRAG publishes master trust financial sustainability paper and updates TCFD guidance

PRAG publishes master trust financial sustainability paper and updates TCFD guidance

PRAG publications come ahead of its annual conference this week

Jonathan Stapleton
clock 18 November 2024 • 1 min read
Industry responds to DC and LGPS changes confirmed in Mansion House speech

Industry responds to DC and LGPS changes confirmed in Mansion House speech

Concerns about fewer individuals making decisions, member returns and sustainability

Jasmine Urquhart
clock 15 November 2024 • 5 min read
Women in Pensions and Rising Star Awards 2024: Photos from the night!

Women in Pensions and Rising Star Awards 2024: Photos from the night!

The industry's best were celebrated in a glittering ceremony on 14 November

Professional Pensions
clock 15 November 2024 • 1 min read
Trustpilot