Tag Archives: projected benefit obligation

International M&A deals can benefit from independent actuarial valuations

A Milliman client, a global information technology (IT) company, acquired an operation in Spain. Along with the acquisition came the operation’s local retirement program, with its associated assets and liabilities, including a defined benefit (DB) pension obligation.

As part of the acquisition process, an actuary—appointed by the seller—carried out an actuarial valuation of the existing local retirement liability. Not long after the acquisition, the company asked Milliman to carry out the actuarial valuations for accounting purposes, covering operations in several countries.

To read more about the work Milliman did—and to learn why expert international actuarial advice is so important for successful global M&A deals—see Dominic Clark’s article here.

Change in amortization methodology reduces pension expense

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.