We are pleased to share with you Ryan ALM’s latest research paper, “Pension De-risking, Cash Flow Matching versus Duration Matching”. You can view the full white paper here.
Many defined benefit systems, especially within the private sector, have been engaged in de-risking activities for some time now. The prevailing methodology has been to use duration matching, but is that really the most effective way to secure the promised benefits at the lowest cost and reasonable risk? We believe that Cash Flow Driven Investing (CDI) is the more effective process to ensure that the cash flows will be available to meet the benefits as they come due. This piece will explain why we’ve come to that conclusion.
We hope that you find our thoughts insightful, and we look forward to receiving your feedback whether in the form of questions, comments and/or concerns. Don’t hesitate.