Ryan ALM
White Papers
Pension ROA: Trick or Treat
The pension return on assets (ROA) assumption is a critical calculation since it affects both assets (asset allocation) and liabilities (discount rate). Most plan sponsors and their consultants focus on the ROA as the assets hurdle rate for asset allocation. Public and multiemployer pension plans…
How Bonds Reduce the Cost to Fund Pensions
Ryan ALM believes that the true objective of any pension is to secure the promised benefits in a cost-efficient manner with prudent risk. Benefits are future value (FV) numbers calculated by the actuary as the liability cash flows (including administrative expenses)…
Reverse Yield Gap is BACK!
Historically stocks were considered riskier than government bonds, so equities offered a higher dividend yield than the yield on the 10-year Treasury to attract buyers. But beginning in the mid-20th century stock prices rose and bond interest rates climbed to levels higher than dividend yields especially in…
Why Cash Flow Matching Deserves a Fresh Look
With 30-year Treasury yields at their highest level in a quarter-century, the old-school pension objective of matching contractual asset cash flows to future pension obligations warrants a fresh look. What represents a growing burden for the U.S. Treasury may offer…
What does AI say about Pensions?
I recently wrote a white paper titled “What is the TRUE objective of a Pension?”. I gave my paper to Chat GPT and asked for its critique. Here is what I received (paraphrased):
What is the TRUE Pension Objective?
We at Ryan ALM believe that the true objective of any pension is to secure the promised benefits in a cost-efficient manner with prudent risk. But don’t take our word for it…
Is your Asset Allocation Responsive to your Funded Status?
According to the Milliman Public Fund Survey of 2025, funded ratios improved significantly from June 30, 2020, where the average funded ratio was 71.0% versus 88.7% as of June 30, 2026…
Pension Alert: Check your Glide Path
A pension glide-path strategy and discipline is supposed to be responsive to the funded status. As the funded ratio / status improves over time, asset allocation should respond by de-risking from a high allocation to risky assets to a more conservative fixed income allocation (ideally cash flow matching to secure the improved funded status)…
Ryan ALM Turnkey System
To secure and fund the projected benefit payments in a cost-efficient manner with prudent risk. Pensions are all about asset cash flows versus liability cash flows. In addition, corporate pensions want the annual dollar growth of pension assets to match or…
Pension Problem: Future Values
The true objective of a pension is to secure promised benefits in a cost-effective manner with prudent risk. Pension benefit payments are future value numbers. We do not know the future value…
Pension Game - Find the Liabilities
The true objective of a pension is to fund liabilities (benefits + expenses) in a cost-efficient manner with prudent risk. Although the management of pensions should have a liability driven objective, it is hard to find…
Negative Cash Flows… Good or Bad for Pensions
It is traditionally considered that it is bad for a pension to be cash flow negative (CFN). But let’s take a closer look. CFN means that benefits exceed contributions (B > C). Contributions are an extra cost caused by…