The Importance of Hiring an Independent Actuary
As with many professional industries, pension actuaries / firms have a variety of experiences with their clients that lead to a range of comfort levels/expertise. Some actuaries/firms have developed PBGC premium savings strategies, investment strategies or plan design strategies for a particular client that may apply and appeal to your plan. But, many plan sponsors have little interest in changing their enrolled actuary who produces the annual valuation results and likely, provides their strategic consulting advice.
Plan sponsors may be well served in getting a fresh look or second opinion to hear about strategies that may not have been raised by their valuation actuary. An independent actuarial review can uncover valuable strategies without requiring a change to the valuation actuary. For example, there are PBGC premium savings strategies that can save 50% of variable premiums (even if not at the cap) that do not require cash contributions, lump sum payouts or transfer of assets to insurance companies. There are investment strategies that can double the expected returns per unit of funded status risk. There are plan designs that can provide equivalent benefits for each participant that can cut pension liabilities and service costs from 10% – 25%. An independent actuarial review may provide millions of dollars of savings to your company….
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