This document discusses moving away from defined benefit pension plans to defined contribution plans. It notes the shift from guaranteed returns in defined benefit plans to non-guaranteed returns in defined contribution plans. This transfers risk from pension funds to individuals. The document also discusses allowing pension funds to take more investment risk to try and generate higher returns through riskier asset allocations. However, higher risk does not guarantee higher returns and could result in lower returns. The document concludes that interest rate risk becomes more of an investment decision rather than a risk management decision when moving away from defined benefit plans.
Ratios are relatively unimportant in isolation. For maximum value, we should monitor trends (e.g., ratio this quarter compared to the previous quarter) and compare our ratios to peer averages or another type of benchmark (i.e., ratio compared to other credit unions with similar characteristics).
Book Recommendation: Waring, M. Barton. Pension Finance – Putting the Risks and Costs of Defined Benefit Plans Back under Your Control. New Jersey: John Wiley & Sons, Inc., 2012. Print
Ratios are relatively unimportant in isolation. For maximum value, we should monitor trends (e.g., ratio this quarter compared to the previous quarter) and compare our ratios to peer averages or another type of benchmark (i.e., ratio compared to other credit unions with similar characteristics).
Book Recommendation: Waring, M. Barton. Pension Finance – Putting the Risks and Costs of Defined Benefit Plans Back under Your Control. New Jersey: John Wiley & Sons, Inc., 2012. Print
Credit risk refers to the risk that a borrower will default on any type of debt by failing to make payments which it is obligated to do. The risk is primarily that of the lender and includes lost principal and interest, disruption to cash flows, and increased collection costs. The loss may be complete or partial and can arise in a number of circumstances. For example:
• A consumer may fail to make a payment due on a mortgage loan, credit card, line of credit, or other loan
• A company is unable to repay amounts secured by a fixed or floating charge over the assets of the company
• A business or consumer does not pay a trade invoice when due
• A business does not pay an employee's earned wages when due
• A business or government bond issuer does not make a payment on a coupon or principal payment when due
• An insolvent insurance company does not pay a policy obligation
• An insolvent bank won't return funds to a depositor
• A government grants bankruptcy protection to an insolvent consumer or business.
To reduce the lender's credit risk, the lender may perform a credit check on the prospective borrower, may require the borrower to take out appropriate insurance, such as mortgage insurance or seek security or guarantees of third parties, besides other possible strategies. In general, the higher the risk, the higher will be the interest rate that the debtor will be asked to pay on the debt.
The Asset Return - Funding Cost Paradox: The Case for LDINorman Ehrentreich
Presentation for the IQPC Pension Plan De-Risking Conference on November 9th and 10th in New York (preliminary draft)
Proves that lower returning LDI strategies can result in lower funding costs than higher returning, but more volatile equity strategies. Furthermore argues that this is most likely the standard case in reality.
Asset intensive reinsurance has been a hot topic in the marketplace, in particular reinsurance for fixed annuities, variable annuities and indexed annuities.
With variable annuities in particular, the products have been written recently specifically combat the difficulties posed by the low interest rate environment. With GAAP ROEs as healthy as ever, solution providers (banks/reinsurers) are looking to enter into the variable annuity reinsurance market to get their "share of the pie".
The asset intensive reinsurance world is evolving rapidly, and I will be presenting this evolution for certain high-profile products during the Valuation Actuary Symposium on 8/31 at 10:00 AM.
Hope to see many of you friendly faces there!
In collaboration with GMT Capital, Clement Ashley Consulting recently held a nation-wide capital market investors conference in ten cities. This is the slideshow of the presentation I made at the conference.
Five Trends Reshaping the Global Pension Fund IndustryState Street
This executive briefing explores how pension funds are adapting to the challenges of a new investment environment. The research presented in this report is based on an international State Street survey, conducted by the Economist Intelligence Unit in August 2014, of 134 senior executives in the pension fund industry.
Credit risk refers to the risk that a borrower will default on any type of debt by failing to make payments which it is obligated to do. The risk is primarily that of the lender and includes lost principal and interest, disruption to cash flows, and increased collection costs. The loss may be complete or partial and can arise in a number of circumstances. For example:
• A consumer may fail to make a payment due on a mortgage loan, credit card, line of credit, or other loan
• A company is unable to repay amounts secured by a fixed or floating charge over the assets of the company
• A business or consumer does not pay a trade invoice when due
• A business does not pay an employee's earned wages when due
• A business or government bond issuer does not make a payment on a coupon or principal payment when due
• An insolvent insurance company does not pay a policy obligation
• An insolvent bank won't return funds to a depositor
• A government grants bankruptcy protection to an insolvent consumer or business.
To reduce the lender's credit risk, the lender may perform a credit check on the prospective borrower, may require the borrower to take out appropriate insurance, such as mortgage insurance or seek security or guarantees of third parties, besides other possible strategies. In general, the higher the risk, the higher will be the interest rate that the debtor will be asked to pay on the debt.
The Asset Return - Funding Cost Paradox: The Case for LDINorman Ehrentreich
Presentation for the IQPC Pension Plan De-Risking Conference on November 9th and 10th in New York (preliminary draft)
Proves that lower returning LDI strategies can result in lower funding costs than higher returning, but more volatile equity strategies. Furthermore argues that this is most likely the standard case in reality.
Asset intensive reinsurance has been a hot topic in the marketplace, in particular reinsurance for fixed annuities, variable annuities and indexed annuities.
With variable annuities in particular, the products have been written recently specifically combat the difficulties posed by the low interest rate environment. With GAAP ROEs as healthy as ever, solution providers (banks/reinsurers) are looking to enter into the variable annuity reinsurance market to get their "share of the pie".
The asset intensive reinsurance world is evolving rapidly, and I will be presenting this evolution for certain high-profile products during the Valuation Actuary Symposium on 8/31 at 10:00 AM.
Hope to see many of you friendly faces there!
In collaboration with GMT Capital, Clement Ashley Consulting recently held a nation-wide capital market investors conference in ten cities. This is the slideshow of the presentation I made at the conference.
Five Trends Reshaping the Global Pension Fund IndustryState Street
This executive briefing explores how pension funds are adapting to the challenges of a new investment environment. The research presented in this report is based on an international State Street survey, conducted by the Economist Intelligence Unit in August 2014, of 134 senior executives in the pension fund industry.
Scott Edmunds, Senior Investment Consultant at Quantum Advisory, shares his thoughts on the growing trend of secondary funding objectives for DB pension schemes in July 2018's copy of the PMI Pensions Aspects. During a period of record low interest rates, the objective of achieving a 100% funding status seemed, at best, elusive, with the days of recording a pension scheme surplus appearing to have been firmly relegated to the pages of history for many pension schemes….
This M Intelligence piece will explore the product mechanics and design considerations of Whole Life (WL) insurance. There are two general categories of WL...
Protect Your Assets - Equity Downside Hedging: presentation from the teach-in covering why tail risk hedging may be useful for institutional investors, types of strategies available and important things for investors to consider.
Recent alarming reports by the Intergovernmental Panel on Climate Change (IPCC) show that climate change is “a grave and mounting threat” to our wellbeing and the health of our planet. A swift transition to a sustainable economy is required to prevent physical climate risks like floods and heatwaves from rapidly increasing, both in frequency and severity. However, the transition itself also entails risks.
Financial institutions – and banks in particular – are uniquely positioned to play a pivotal role in the transition to a sustainable economy. The transition is providing a wide range of opportunities for banks, from large financing needs to the introduction of green bonds and sustainability-linked derivatives. At the same time, it is of paramount importance for banks to adopt a climate change-resilient strategy and to integrate climate change risk into their risk frameworks. This is underlined by the increased scrutiny of this issue by regulators in recent years.
During this year’s edition of the Zanders Risk Management Seminar on September 8, 2022, speakers from various backgrounds shared their views on climate change risk. They provided insights into the climate changes that are anticipated for the decades to come, shared possible approaches for climate risk quantification and stress testing, discussed the need for new data sources, and explained how climate change risk can be integrated in existing risk frameworks.
For more information on climate risk, please visit our website: https://www.zanders.eu.
Presentation on Zanders NGO event, 4 dec 2014.
Carmen Hett (Treasurer, UNHCR)
“How UNHCR is centralizing Cash Management in a decentralized organizational structure”
EMIR draft regulatory technical standards on contracts having a direct direct, substantial and foreseeable effect within the Union and non-evasion of provisions of EMIR
Falcon stands out as a top-tier P2P Invoice Discounting platform in India, bridging esteemed blue-chip companies and eager investors. Our goal is to transform the investment landscape in India by establishing a comprehensive destination for borrowers and investors with diverse profiles and needs, all while minimizing risk. What sets Falcon apart is the elimination of intermediaries such as commercial banks and depository institutions, allowing investors to enjoy higher yields.
BYD SWOT Analysis and In-Depth Insights 2024.pptxmikemetalprod
Indepth analysis of the BYD 2024
BYD (Build Your Dreams) is a Chinese automaker and battery manufacturer that has snowballed over the past two decades to become a significant player in electric vehicles and global clean energy technology.
This SWOT analysis examines BYD's strengths, weaknesses, opportunities, and threats as it competes in the fast-changing automotive and energy storage industries.
Founded in 1995 and headquartered in Shenzhen, BYD started as a battery company before expanding into automobiles in the early 2000s.
Initially manufacturing gasoline-powered vehicles, BYD focused on plug-in hybrid and fully electric vehicles, leveraging its expertise in battery technology.
Today, BYD is the world’s largest electric vehicle manufacturer, delivering over 1.2 million electric cars globally. The company also produces electric buses, trucks, forklifts, and rail transit.
On the energy side, BYD is a major supplier of rechargeable batteries for cell phones, laptops, electric vehicles, and energy storage systems.
What website can I sell pi coins securely.DOT TECH
Currently there are no website or exchange that allow buying or selling of pi coins..
But you can still easily sell pi coins, by reselling it to exchanges/crypto whales interested in holding thousands of pi coins before the mainnet launch.
Who is a pi merchant?
A pi merchant is someone who buys pi coins from miners and resell to these crypto whales and holders of pi..
This is because pi network is not doing any pre-sale. The only way exchanges can get pi is by buying from miners and pi merchants stands in between the miners and the exchanges.
How can I sell my pi coins?
Selling pi coins is really easy, but first you need to migrate to mainnet wallet before you can do that. I will leave the telegram contact of my personal pi merchant to trade with.
Tele-gram.
@Pi_vendor_247
Even tho Pi network is not listed on any exchange yet.
Buying/Selling or investing in pi network coins is highly possible through the help of vendors. You can buy from vendors[ buy directly from the pi network miners and resell it]. I will leave the telegram contact of my personal vendor.
@Pi_vendor_247
Poonawalla Fincorp and IndusInd Bank Introduce New Co-Branded Credit Cardnickysharmasucks
The unveiling of the IndusInd Bank Poonawalla Fincorp eLITE RuPay Platinum Credit Card marks a notable milestone in the Indian financial landscape, showcasing a successful partnership between two leading institutions, Poonawalla Fincorp and IndusInd Bank. This co-branded credit card not only offers users a plethora of benefits but also reflects a commitment to innovation and adaptation. With a focus on providing value-driven and customer-centric solutions, this launch represents more than just a new product—it signifies a step towards redefining the banking experience for millions. Promising convenience, rewards, and a touch of luxury in everyday financial transactions, this collaboration aims to cater to the evolving needs of customers and set new standards in the industry.
what is the future of Pi Network currency.DOT TECH
The future of the Pi cryptocurrency is uncertain, and its success will depend on several factors. Pi is a relatively new cryptocurrency that aims to be user-friendly and accessible to a wide audience. Here are a few key considerations for its future:
Message: @Pi_vendor_247 on telegram if u want to sell PI COINS.
1. Mainnet Launch: As of my last knowledge update in January 2022, Pi was still in the testnet phase. Its success will depend on a successful transition to a mainnet, where actual transactions can take place.
2. User Adoption: Pi's success will be closely tied to user adoption. The more users who join the network and actively participate, the stronger the ecosystem can become.
3. Utility and Use Cases: For a cryptocurrency to thrive, it must offer utility and practical use cases. The Pi team has talked about various applications, including peer-to-peer transactions, smart contracts, and more. The development and implementation of these features will be essential.
4. Regulatory Environment: The regulatory environment for cryptocurrencies is evolving globally. How Pi navigates and complies with regulations in various jurisdictions will significantly impact its future.
5. Technology Development: The Pi network must continue to develop and improve its technology, security, and scalability to compete with established cryptocurrencies.
6. Community Engagement: The Pi community plays a critical role in its future. Engaged users can help build trust and grow the network.
7. Monetization and Sustainability: The Pi team's monetization strategy, such as fees, partnerships, or other revenue sources, will affect its long-term sustainability.
It's essential to approach Pi or any new cryptocurrency with caution and conduct due diligence. Cryptocurrency investments involve risks, and potential rewards can be uncertain. The success and future of Pi will depend on the collective efforts of its team, community, and the broader cryptocurrency market dynamics. It's advisable to stay updated on Pi's development and follow any updates from the official Pi Network website or announcements from the team.
The Evolution of Non-Banking Financial Companies (NBFCs) in India: Challenges...beulahfernandes8
Role in Financial System
NBFCs are critical in bridging the financial inclusion gap.
They provide specialized financial services that cater to segments often neglected by traditional banks.
Economic Impact
NBFCs contribute significantly to India's GDP.
They support sectors like micro, small, and medium enterprises (MSMEs), housing finance, and personal loans.
Currently pi network is not tradable on binance or any other exchange because we are still in the enclosed mainnet.
Right now the only way to sell pi coins is by trading with a verified merchant.
What is a pi merchant?
A pi merchant is someone verified by pi network team and allowed to barter pi coins for goods and services.
Since pi network is not doing any pre-sale The only way exchanges like binance/huobi or crypto whales can get pi is by buying from miners. And a merchant stands in between the exchanges and the miners.
I will leave the telegram contact of my personal pi merchant. I and my friends has traded more than 6000pi coins successfully
Tele-gram
@Pi_vendor_247
how to sell pi coins effectively (from 50 - 100k pi)DOT TECH
Anywhere in the world, including Africa, America, and Europe, you can sell Pi Network Coins online and receive cash through online payment options.
Pi has not yet been launched on any exchange because we are currently using the confined Mainnet. The planned launch date for Pi is June 28, 2026.
Reselling to investors who want to hold until the mainnet launch in 2026 is currently the sole way to sell.
Consequently, right now. All you need to do is select the right pi network provider.
Who is a pi merchant?
An individual who buys coins from miners on the pi network and resells them to investors hoping to hang onto them until the mainnet is launched is known as a pi merchant.
debuts.
I'll provide you the Telegram username
@Pi_vendor_247
Empowering the Unbanked: The Vital Role of NBFCs in Promoting Financial Inclu...Vighnesh Shashtri
In India, financial inclusion remains a critical challenge, with a significant portion of the population still unbanked. Non-Banking Financial Companies (NBFCs) have emerged as key players in bridging this gap by providing financial services to those often overlooked by traditional banking institutions. This article delves into how NBFCs are fostering financial inclusion and empowering the unbanked.
Empowering the Unbanked: The Vital Role of NBFCs in Promoting Financial Inclu...
Zanders seminar pensioenfondsen - Jules Koekkoek
1. Moving away from Defined Benefit
Implications on the investment policy
March 2014
Citi Institutional Client Group
2. Overview
Moving away from DB to (C)DC
Asset allocation - hedging interest rates?
An example from Denmark: removing guaranteed returns
Other regulatory developments: impact from central clearing
Conclusion
4. From defined benefit to defined contribution
- Collective investments
- No guarantees
- Intergenerational risk
sharing?
Defined Benefit Collective Defined Contribution Individual Defined Contribution
- Collective investments
- Defined pension benefit
(guaranteed)
- Intergenerational risk sharing
- Individual investments
- No guarantees
- No risk sharing
Individual
Pension
fund Investment risk and technical risk
Is the current Dutch system effectively a collective defined contribution system?
Defined benefit works well if at least one of the following two conditions is met:
- Sufficient buffer capital in relation to the investment strategy (e.g. insurance companies
and certain pension plans)
- Recourse to a well capitalised employer
5. Asset allocation – comparing pension funds and insurance companies
Insurance companies typically provide a minimum guaranteed return (plus upside) on their traditional life
policies which is effectively a defined benefit plus upside
Dutch pension funds aim to provide a defined benefit at retirement as a percentage of the participant’s
average salary
In general: both seem to use a very different asset allocation to achieve their broadly similar objective
Credit
risk
Equities
and
Rates
1 Risk versus the liabilities, i.e. fixed income investments reduce ALM risk
Key risk1 Key risk1
6. Defined benefit – what is the problem with the current system?
Low pension fund coverage ratios
Restrictions on investment risk due to FTK required buffer capital
No or limited ability to pay indexation (or even forced to reduce pensions)
Insurance companies as the third pillar are deemed an inefficient alternative due to conservative
investment strategies and high costs
Perceived problem: pension funds can not take enough investment risk to generate sufficient returns to
provide a “good” pension
……low returns resulting in expensive pensions
Change the defined benefit pension to a defined contribution (like) system and allow
pension funds to take more investment risk to achieve a good pension
7. Solution - Moving to some form of defined contribution
The debate focuses on the expected / average outcome from taking more investment risk. BUT higher risk
does not guarantee a higher return. It provides a higher expected return and in the worst case returns will
be substantially lower than under less risky investment strategies
In the graph below the solid lines represent a hypothetical base case investment strategy (2.5% worst case,
average and 97.5% best case) and the dotted lines a more risky strategy with a higher expected return
……but higher expected returns also means taking more risk
Objective:
increase the
expected future
coverage ratio
Higher expected
return means
more risk0
50
100
150
200
250
0 5 10
EconomicCoverageRatio
Time
97.5% percentile Average 2.5% percentile
97.5% percentile Average 2.5% percentile
8. Individual defined contribution – shifting the risk to the individual
IndividualPension
fund
Investment risk and technical risk
At retirement: buying an annuity
……but the individual will most likely shift the risk to an insurance company at retirement
The main risks from individual DC plans compared to collective pensions are:
- Investment risk:
- Investment skill and resources
- Scale to access certain opportunities or run certain investment strategies
- Timing of retirement – no intergenerational risk transfer
- Longevity risk: very large risk for an individual which can only be managed practically by
buying an annuity at retirement
Insurer
9. Defined contribution – removing the pension liabilities
No more mark-to-market of liabilities
No FTK buffer capital requirement
……and allowing pension funds to reduce fixed income investments and invest in risky assets
Interest rate risk is shifted from pension fund to the individual members, but is still present.
The individual won’t be able to manage his interest rate risk if the pension fund invests the
pension assets
Interest rate risk of liabilities is shifted to the
individual participant:
– Value of annuity at retirement or
– Return on (fixed income) investment
portfolio once retired
Pension fund perspective Pension fund participant
10. Alternative for moving to full (C)DC – lower guaranteed pension
……give a lower guaranteed pension and invest the surplus in risky assets
Key issue is the required transparency to pension fund participants that their guaranteed
pension will be lower than previously communicated
Assets
105
Pension
Liabilities
100
Liability
matching
portfolio
70
Pension
Liabilities
70
Return
portfolio
35
Pros
Improves pension fund coverage ratio and
stability of coverage ratio (due to reduction in
liabilities)
Allows risk taking in return portfolio
Cons
Significant part of investments tied up in
liability matching portfolio (depending on the
guaranteed pension)
12. Asset allocation
……depends on objectives and constraints set by various stakeholders
Asset
Allocation
Regulatory
Constraints
ALM
Objectives
Current
Coverage
ratio
A key question is how much allocation to fixed income / liability hedging
13. Managing the duration gap – to hedge or not?
……depends on view on interest rates and risk appetite / ability to take risk
View on Rates
Down Unchanged Up
Risktolerance
Low Receiver swap Receiver swap Receiver swaption
High Receiver swap
No hedge (or sell payer
swaptions)
No hedge
Risk tolerance: ability to take interest rate risk from a regulatory perspective (FTK) and from an economic
risk perspective based on ALM objectives
View on interest rates: implement a view on interest rates to generate returns and improve coverage ratio
Moving away from DB allows more risk taking and will require less hedging
DB
DC
14. Interest rates are too low, aren’t they?
……when there is more opportunity to take risk, the decision to hedge rates can become more an
investment view
To hedge Or not?
15. A nominal hedge can become a “real” problem…
For a hypothetical fund with the below characteristics we look at the economic coverage ratio sensitivities:
– Nominal coverage ratio: 105%
– Real coverage ratio: 75%
– Nominal hedge ratio: 70% (no inflation hedge)
– Duration of nominal (real) liabilities: 16 (21)
Nominal Coverage Ratio (Initial ratio: 105%)
Interest Rates
Inflation
-100bps +100bps
-100bps
100% 112%
+100bps
100% 112%
Real Coverage Ratio (Initial ratio: 75%)
Interest Rates
Inflation
-100bps +100bps
-100bps
83% 116%
+100bps
58% 67%
In a real framework high interest rates and inflationary scenarios are a risk to the economic
coverage ratio as opposed to low interest rates (in the current nominal framework)
……when aiming for inflation linked pensions
16. How to keep the upside open in high interest rates scenarios
Linear interest rates hedges can jeopardise the real coverage ratio
Secondly, interest rate swaps may pose a liquidity problem due to collateral requirement under CSAs (or
clearing) if rates rise substantially
Strategies to keep upside in high interest rates (and inflation) scenarios
Pros Cons
1. Reduce nominal
interest rates hedge
Full upside when rates (and
inflation) rise
Risk in low interest rates scenarios
2. Buy inflation linked
bonds
(or inflation swaps +
additional receiver swaps)
Effective hedge for inflation linked
liabilities in all rates and inflation
scenarios
Full inflation hedge requires a high
initial coverage ratio
3. Replace receiver swaps
with receiver swaptions
(or keep receiver swaps
and add a payer swaption)
Protection in low interest rates
scenarios and full upside when
rates (and inflation) rise
Requires option premium
18. Denmark – Moving from a guaranteed rate to DC without guarantee
Lower liabilities
Lower capital requirements
Upfront compensation for giving up guarantee (fair
value of guarantee?)
Ability to take more investment risk and
(potentially) achieve higher return
Minimum
guaranteed rate
on contributions
Defined
contribution
without
guarantee
Transfer policyholders to new DC product
and pay them an upfront compensation
amount
Old system New system
Impact on pension / insurance company Impact on policyholder
Impact on asset allocation: less interest rate hedging / shift away from fixed income investments
19. Comparing investment strategy – ATP versus Dutch pension funds
Main differences: interest rate hedging policy and Solvency II based risk model
• Avoid risks for which we cannot obtain
compensation – hedge interest rate risk
• Efficient risk diversification
• Hedging against very negative events –
use options to hedge tail risk
• Appropriate risk level – Internal Model /
Solvency II (voluntarily adopted)
ATP – Investment Strategy1 Typical Dutch Pension Fund
• Run a duration gap (to a certain
extent)
• Diversified investment portfolio
• Limited use of options / hedging
• FTK required capital
1 Source: www.atp.dk
21. Impact of central clearing on liquidity and asset allocation
Central clearing will increase the liquidity required for margining purposes
Mitigate risk
of liquidity
shortfall from
clearing
Increase
liquidity
Adjust
duration
exposure
Swaps
Government bonds
Overlay with payer
swaptions
Collateral switch /
upgrade
Option on repo
Sell assets to raise cash
when needed
Contingent funding
Repo
Receiver swaptions
Replace swaps with
alternatives to gain
duration
Keep swaps OTC
23. Conclusion
An important reason to move away from the current DB pension system seems to be the desire to
allow pension funds to take more investment risk to generate a better pension over the long term.
Conservative investment strategies with large fixed income portfolios are deemed expensive over
the long term
However a higher expected return over the long term will also mean higher risk which will
ultimately be born by the pension fund participants
Removing pension fund liabilities (and interest rate risk) from the pension fund balance sheet
transfers the risk to the individual who can not practically manage this risk
From a pension fund perspective interest rate risk will become more an investment decision as
opposed to a risk management decision
The introduction of central clearing will require more liquidity for interest rate swaps which will be
an additional drag on investment returns from liability hedging. This is assuming the amount
posted as collateral could be invested elsewhere at higher levels
However funded alternatives to manage duration (i.e. bonds) tie up much more liquidity for the
same amount of interest rate sensitivity, so they are not a good alternative from that perspective
24. Disclaimer (I)
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does not represent actual termination or unwind prices that may be available to you or the actual performance of any products and neither does it present all possible outcomes or describe all factors
that may affect the value of any applicable investment, product or investment. Actual events or conditions are unlikely to be consistent with, and may differ significantly from, those assumed.
Illustrative performance results may be based on mathematical models that calculate those results by using inputs that are based on assumptions about a variety of future conditions and events and
not all relevant events or conditions may have been considered in developing such assumptions. Accordingly, actual results may vary and the variations may be substantial.