Trust beneficiaries spend dollars, not rates of return. Even a well-designed portfolio, operating within expected parameters, and approximating its statistically expected return, runs the risk that its actual dollar value at some critical juncture will differ widely from the projected value. Regular testing of the likelihood that future cash distribution targets can be supported with the dollars on hand is therefore vital. As trust portfolios weather the ups and downs of the capital markets, SCLC monitors dollar sufficiency by:

• Modeling historical variation in performance;

• Adjusting for year-to-year inflation (CPI) experience;

• Adjusting for contribution/distribution history;

• Determining the probability of a future dollar surplus or shortfall.

Armed with this information, trustees can decide whether to make early, and therefore relatively small, marginal adjustments to spending policy or asset allocation, in order to increase the long-term probability that the portfolio will satisfy trust objectives.