valuation of a retirement plan is an estimate of a plan's
financial position at a specific point in time. During
a valuation, an actuary takes a "snapshot"
of the membership as of a given date to determine the
plans liabilities and funded status.
actuarial valuation projects the expected cash flow
of plan members benefits. Actuarial projections
are derived from a combination of judgement and science,
based on assumptions about the likely occurrence of
future events that affect the outcome and duration
of pension benefits.
of annual or biennial valuations of all 106 contributory
retirement systems requires the assistance and cooperation
of the private actuarial community. PERAC encourages
retirement systems to conduct RFPs (Request for Proposals)
to select private actuaries with whom they can establish
ongoing relationships. There are a number of firms
that provide actuarial services for pension plans.
Recently completed valuation studies (including
those completed by PERAC in-house and those provided
by private actuaries) are posted here. Retirement
boards are encouraged to view these reports and to
contrast and compare the various presentations.
accept a private valuation as meeting the biennial
requirement stipulated in Chapter 32, provided the
Commission staff has the opportunity to work with
the private actuarial firm throughout the valuation
process and to review their draft report before the
valuation is finalized.