pension payment is not adjusted for inflation.Why?

CFA Level III
#1

pension payment is not adjusted for inflation. Why?

#2

Who? what?

have you forgotten the impact of inflation on Pension payments from level II FSA? [wage Growth rate]

and if you read the chapter where the “ALM” on Pension is discussed in Level III - also for places where Inflation makes an impact - the recommended asset is Equities.

#3

cpk, I think he is referring to the actual payments to retirees.

neilzou, usually company doesn’t index the payments, they are fixed payouts unless questions specifically tells you that it is indexed with COLA.

#4

thanks Passme…

forgot that aspect.

#5

Thanks for both of you.