Actuarial Services Need Not be a Black Box
A defined benefit (DB) or cash balance (CB) plan is more than just an employee benefit. Properly structured, a DB or CB plan can be an elegant tool to help manage cash flow, maximize profitability, and super charge the retirement accounts of key employees and business owners. For many advisors and indeed even for most plan sponsors, the actuarial services for a DB or CB plan remain a mystery, in a black box somewhere. It appears that actuarial service providers have taken their eye off the ball for all but the largest of clients. Often, the only time a client hears from their service provider is when the annual funding notice comes detailing the amount that must be contributed to the plan. That’s not the way Northwest Plan Service (NWPS) operates. We open the black box to explain how the calculations are constructed and how to use the plan to meet business objectives. With the client’s long term goals in mind, NWPS can develop a multi-year funding strategy that best meets the goals for cash flow, balance sheet considerations, maximizing tax-deferrals and minimizing PBGC premiums. We carefully monitor the plan and the rate of accrual for benefits. We’ll then provide a quarterly scorecard