How to understand the sentence

the term structure of this benefit is mimicked by nominal bonds

how do we understand this, bond has similar interest payout as the pension? The longer the horizon is the higher the rate?


Missing part of your sentence. What benefit is mimicked by nominal bonds?

My guess is typical pension benefits that don’t inflate.

A typical pension pays a fixed CF for the life of the participant (e.g. 65k per year). This most closely mimics a nominal bond whose CF is also fixed for the term of the bond.