contact us
Actuarial
Defined Benefit Plan Freeze Analysis
A recent surge in high-profile pension plan freezes has prompted many companies to examine the potential benefits of following this action. However, a plan sponsor must fully understand all of the pros and cons of pursuing a cessation of future benefits for employees, including comprehending life in a post-freeze world. Cowden Associates can help you by analyzing the advantages and disadvantages of freezing and ultimately terminating a defined benefit pension plan, including developing replacement plans, funding and expense projections, investment consulting services, communication services, actuarial services, and compliance assistance.
Termination services (including actuarial valuation, communications, compliance, assistance with purchasing annuities and/or providing roll-over solutions for lump-sum distributions):
| Description | Freeze Scenario | Plan Termination Scenario |
|---|---|---|
Actuarial Support |
Cash-flow and expense projections; preparation of post-frozen valuations and required support; Analysis of Highly Compensated Employees Benefits (how to make-up the shortfall?) |
Termination calculations and required governmental filings |
Financial Management |
Cash-flow, expense and balance sheet projections; determination of funding-up to achieve 100% funding |
Cash-flow, expense and balance sheet projections; determination of funding-up to achieve 100% funding |
Investment Coordinator |
Assistance in setting the financial management strategy |
Assistance in setting the financial management strategy; assistance in purchasing annuities and/or lump sum rollover opportunities for participants |
Plan Management |
Managing the plan to a desired point (end-game) that meets the Plan Sponsor’s business objectives |
Coordinate all activities in winding-up the Plan, including communications and compliance |