The cashflow challenge

A period of high interest rates not seen for many years presents a considerable challenge for cashflow to ensure that pension funds have enough money to cover their liabilities.

• Pensions going up 10% in April 2023 will result in a large cashflow hit on many pensions with many funds being cashflow negative.
• With near base rates not expected for the foreseeable future, what should funds be doing now to mitigate this. How are funds coping from a cash perspective.
• Where do we go to generate enough income to pay the pensions – what does this mean for our investment strategy – is reducing equities the only answer.
• How we can ensure there is enough flexibility within the portfolio to adapt to changing circumstances
• How can the manager provide solutions?