Defined Benefit Plan consulting involves providing expert guidance and assistance to organizations that offer defined benefit pension plans to their employees. A defined benefit plan is a retirement plan in which the employer promises to pay a specific benefit amount to employees upon their retirement, based on a predetermined formula that typically considers factors such as salary, years of service, and age.
Here are some of the key aspects of defined benefit plan consulting:
As defined benefit plan consultants we work closely with employers to design and implement the structure of the plan. They help determine the benefit formula, vesting schedule, retirement age requirements, and other plan provisions based on the organization's goals and objectives.
Actuarial expertise is crucial in defined benefit plan consulting. NFC partners with actuaries to provide actuarial calculations and methodologies to assess and project the plan's financial obligations and determine funding requirements. They perform actuarial valuations to estimate the plan's liabilities and funding levels, ensuring that the plan remains financially viable and meets regulatory requirements.
Defined benefit plans are subject to strict regulations and compliance standards, such as those outlined in the Employee Retirement Income Security Act (ERISA) in the United States. We assist employers in understanding and adhering to these regulations, ensuring that the plan meets all necessary compliance standards and reporting requirements.
NFC provides guidance on developing an investment strategy that aligns with the plan's funding goals and risk tolerance. They help employers select appropriate investment vehicles, such as stocks, bonds, real estate, and alternative investments, and determine the optimal asset allocation to achieve long-term growth and manage risk.
As defined benefit consultants NFC will assist employers in managing the plan's funding requirements and cost structure. We help employers determine the contribution levels necessary to meet the plan's funding obligations while considering factors such as actuarial assumptions, market conditions, and budgetary constraints. also provide strategies to manage funding volatility and mitigate potential financial risks.
NFC supports employers in administering the plan effectively. This includes calculating and processing benefit payments, maintaining participant records, ensuring compliance with reporting requirements, and communicating plan changes and updates to participants. Clear and effective communication with plan participants is essential to help them understand their benefits and make informed decisions about retirement.
NFC will assist employers in identifying and managing risks associated with the plan. This includes evaluating the impact of demographic changes, investment performance, and regulatory changes on the plan's financial health. We’ll also provide guidance on plan termination strategies, including options such as annuity purchases, lump-sum distributions, or transferring liabilities to an insurance company.
Defined benefit plan consulting requires expertise in actuarial science, investment management, regulatory compliance, and retirement plan administration. By providing comprehensive partnerships, guidance and support, NFC helps employers navigate the complexities of defined benefit plans, optimize funding strategies, and ensure the long-term sustainability of the retirement benefits provided to employees.
The NFC team is ready to serve you and your organization. If you would like to speak to a consultant or learn more about our service please Schedule a Consultation below: