Earlier quoted context omitted.
Why does it matter if volatility is lower than the market? Future payments in the short term are covered by inflows. You might as well maximize the returns now so that in the future when it's not covered by inflows you've acrewed a larger return.
> Future payments in the short term are covered by inflows. is that similar to the Ponzi scheme pattern, though?
Ponzi schemes always make current payments out of current inflows. The first 10 people get paid from the inflows from the next 100 people who get paid from the next 1000 people and so on, until you run out of people to sign up and the last group is left holding the bag. This is how Social Security works in the US because it started out by making payments to people who never paid in and was premised on the early 20th century fertility rate of >3.5 instead of the current ~1.6 to keep the system from collapsing, which is why the "trust fund" is running out of money -- it never had enough to cover future payments to begin with.
Whereas having individual years when the fund pays out more than it collected in interest is not a problem as long as that's not what happens on average.