I have a few questions on IPS, which I’m not quite sure about the answers. I think there is a standard answer to them. Here are the first two.
1, The liquidity needs are paid at the end of year, but the inflation rate doesn’t apply in the current year. For example, the annual liquidity need is $100,000, and the inflation is 2%. The liquidty need for the first year is still $100,000.
2, If not specified, the IPS review happens at the beginning of the year. This hardly causes problems, but it may help to simplify problems in case of retirements.