Tag Archives: projected benefit obligation

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.