Senior management tells the plan sponsors that they will be offering a one-time, lump sum early retirement package to eligible employees beginning in the next 24-30 months. Senior management estimates that 10% of the existing company workforce will accept this retirement package.
Is the statement: “given the expected lump sum retirement payout in the next 24-30 months, the cash flow matching strategy is clearly better for the pension plan because of the certainty of the company’s pension obligation” correct?