Many pension plan sponsors are looking to make sure their funding policies are appropriate and sustainable. What are some options for amortizing unfunded liability? This Dear Actuary column highlights three distinct approaches: open amortization, closed amortization, and layered amortization.
Ninety percent of one pension plan’s expense was tied to its loss amortization component. The fact that this single component of pension expense influenced the results so heavily caused Milliman consultants to look more deeply into the loss amortization method in order to address the plan sponsor’s concerns. In this article, Michael Mikhitarian explains how the firm worked with the sponsor and its auditor to change the plan’s amortization methodology to reduce pension expense.