Defined Benefit Plan Freeze Analysis

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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 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.  Cowden’s President/CEO Elliot Dinkin published an article addressing the pros and cons of pension plan freezes.  Click here to read the article.

We also provide 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

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We welcome your inquiries about Cowden Associates, Inc. and look forward to introducing you to our services and professionals.

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