Retirement Developments

Rael & Letson consultants have been active with various projects focusing on Retirement topics. Below are three examples:

1. Variable Defined Benefit (“DB”) Plan Start-up
2. Growing the Active Population
3. Public Plan Valuation Audit

  1. Variable Defined Benefit (“DB”) Plan Start-up—Rael & Letson has collaborated with a local multiemployer construction industry group to establish a new variable defined benefit pension plan that is expected to be sustainable for the long term.  Using new funding sources, this plan will supplement the existing retirement benefits and improve lifetime benefit adequacy for members while providing greater control over benefit delivery. 

Outcome: Significantly improved employer provided benefit delivery for career union members by establishing an inflation-protected source of lifetime retirement income.

For more information about a Variable Defined Benefit, Please watch this video
  1. Growing the Active Population—Rael & Letson worked closely with a Board of Trustees to implement a Variable DB design for future benefit accruals and obtain PBGC approval for a two-pool withdrawal liability method that will significantly reduce funding risk for prospective employers to an established, well-funded but mature, non-construction multiemployer pension plan.  

Outcome: Two new employers joined the plan increasing the contributions by about 40% and reducing ongoing plan funding risk for all participating employers.

  1. Public Plan— Rael & Letson provided audit valuation services for a public entity including a comprehensive review of the plan’s mortality basis for determining monthly benefits under optional payment forms (i.e., Joint & Survivor pensions). By updating the mortality table used for calculations of Joint & Survivor benefits, the plan’s assumption will align with current industry standards, longer life expectancies and plan-specific experience.

Outcome: The plan is in the process of updating the mortality basis used for calculations of Joint & Survivor pensions to reflect current mortality patterns resulting in higher monthly benefits to married participants.

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