quiz- independent foundation vs. DB plan

foundation, between, unlike

An independent foundation, unlike a DB plan, does not need to consider the correlation between plan sponsor financial performance and the performance of the portfolio.

Chuckrox

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发表于 2011-7-11 20:07 | 只看该作者

That would be correct..

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skycfa

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发表于 2011-7-11 20:07 | 只看该作者

True...
Foundation = No defined liability stream...
Purpose = Making grants...

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Analyze_This

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发表于 2011-7-11 20:07 | 只看该作者

very good. how about this one?

like a DB plan, the liquidity needs of an independent foundation fluctuate over time.

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liangfeng

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发表于 2011-7-11 20:07 | 只看该作者

Hum... I don't think I agree....

Foundations liquidity needs are defined by the spending rule...

It does fluctuate over time because a fixed % spending of fluctuating assets does vary but in essence, the foundations are not required by any defined liability to provide any other funds than the required 5%...

If it's purpose it to increase the amount of grant-making, then yes, the liquidity needs should increase year after year but if it's purpose is to provide a constant stream of grants year after year adjusted for inflation, then it should remain relatively constant on a real $ basis...

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thommo77