Actuarial Audit
A single employer plan sponsor facing large contribution increases needed clarity about the reason for the increase. After replicating the actuarial liabilities, we quantified the sources of change and validated that the increase was reasonable. The replication exercise identified one minor computational error within the valuation calculations that persisted for several years. We worked with the plan’s legal counsel to resolve the matter with the IRS without penalty.
The plan sponsor subsequently requested a full plan administration review to evaluate the consistency of benefit calculations and participant communications with the written terms of the plan and current legal and regulatory requirements.
Today, the plan’s fiduciaries have full transparency into their cost drivers and are reassured that plan administration and financing are consistent with the employer’s intent in providing these benefits.
Longevity/Mortality Profile Analysis
As a Club Vita licensed pension consultant, Infinity Actuarial Consulting can access a robust set of tools, analytics, and insights to help employers understand the longevity risk associated with their retirement plans. By analyzing the diversity of an employer’s population, mortality assumptions can be calibrated to reflect the plan’s unique risk profile.
Understanding how long participants can expect to live – and the tail risk of living longer – is key to developing custom mortality assumptions for annual valuations, providing insights to drive better pricing of pension risk transfer transactions, and supporting participant-focused education.
Financial Wellness
Through an alliance with Western Reserve Education and Consulting, we offer a suite of services promoting financial literacy and financial wellness to help employers support their employees in saving for retirement and managing their day-to-day finances. These services include educational materials, in-person seminars, online education, and one-on-one coaching.
Western Reserve’s founder, Steve Leskovec, created The Life Skills Curriculum to help young adults succeed in life and learn how to manage their money. Now, he has expanded his consulting scope to work with corporate employers whose workforces of all ages will benefit from learning or reinforcing these foundational life skills.
Plan Compliance Corrections
After initiating a standard plan termination, a plan sponsor’s annuity placement team identified a potential deficiency in the calculations prepared by the plan’s actuary. After a preliminary review of the prior actuary's work, we identified the source of the errors. Based on these findings, the client requested a full benefit calculation audit of historical calculations for all participants. Our investigation revealed more than 20 different calculation errors and administration deficiencies in the prior administrator’s work.
We worked collaboratively with the plan’s ERISA counsel to craft a Voluntary Compliance Correction proposal to the IRS. Due to the thoroughness of our review and submission the IRS approved the correction as submitted, allowing the plan sponsor to complete the plan termination process with a “clean bill of health”.
Total Compensation Statements
A plan sponsor with two distinct classes of employees – front-line warehouse personnel and salaried office staff and management – heard from their hourly workforce that there was a perception of these two groups being the “haves” and “have nots” because of the differences in benefit structure. Hourly employees had a rich defined benefit plan with no 401(k), while salaried employees received a generous 401(k) contribution with a nominal “supplemental” defined benefit accrual. Hourly employees understood a 401(k) contribution of a percentage of their pay, and did not have the same appreciation for the cost of their defined benefit plan accruals.
To support the total rewards staff in messaging the value of benefits provided to Hourly employees, we designed total compensation statements that illustrated for Hourly employees the cost of their comprehensive employee benefits package as a “hidden” hourly wage. When employees saw the value of their employee benefits expressed in terms of how much more they earn in addition to their paycheck, the complaints slowed and the company’s Hourly workers’ defined benefit plan became a valued component of their total rewards package.
