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

Buzz: Is buyout the universal 'gold standard' option for endgame?

Buzz: Is buyout the universal 'gold standard' option for endgame?

Endgame options, targeted support for members and scheme tax relief subsidies

Professional Pensions
clock 30 June 2025 • 1 min read
News Digest: Pension pots of savers at risk from new UK rule, industry experts warn

News Digest: Pension pots of savers at risk from new UK rule, industry experts warn

PP brings together all the latest news on pensions from across the national and financial media

Professional Pensions
clock 30 June 2025 • 1 min read
Professional Pensions: Stories of the week

Professional Pensions: Stories of the week

Festina Finance enters UK pensions admin market, Schroders scheme invests in LTAF and £900m bulk annuity deal

Professional Pensions
clock 27 June 2025 • 1 min read
Trustpilot