Assessing your pension plan’s risks
Multiemployer Defined Benefit (DB) plan solvency risk has significantly increased in the last 20 years with the substantial decline in union membership, technology advances, and investment market underperformance. While your plan may not be one facing insolvency, your actuary’s statistics likely reflect a plan that is far more mature than 20 years ago. As a result, corrective actions to future benefits for actives and employer contribution increases will vary in their effectiveness in assisting an underfunded plan.
Completing a risk assessment may help you proactively address a problem before it is too late. If you don’t know the answers to the following questions, then a risk study may be appropriate for your plan.
- Does your Board understand the tools that remain and their effects in correcting any funding shortfall?
- Is there a funding target that would be best for your plan to achieve in safeguarding its long-term sustainability?
- Are your plan’s investments appropriate given your plan’s funded position, recovery tools and maturity?
We can help you answer these questions and more to ensure the future health of your plan.