Actuarial Valuation results as well as Deterministic and Stochastic Projections can serve as effective tools in order to conduct advanced Experience Studies and evaluate impacts of different Assumption sets for defined benefit pension plans, including the following key items:
Demographic Assumptions
Traditional Experience Studies can be carried out in order to establish Demographic Assumptions, such as mortality rates, termination rates, disability rates, retirement rates, salary scales, and others.
Economic Assumptions
Traditional Experience Studies can be carried out in order to establish Economic Assumptions, such as discount rates, expected return on assets, cost of living adjustments, inflation, and others.
Deterministic Experience Studies
Experience Study results are analyzed and the impacts of various assumption sets are investigated by carrying out Deterministic Projections of asset and liabilities, based on these assumption sets and Investment Policies.
Stochastic Experience Studies
Experience Study results are analyzed and the impacts of various assumption sets are investigated by carrying out Stochastic Projections of asset and liabilities, based on these assumption sets and Investment Policies.
Cross-Optimized Expected Return
Economic Assumptions for pension portfolio’s expected returns can be optimized with Investment Policy as part of a single optimization process. In this case Economic Assumptions for expected returns and Investment Policy will be cross-optimized.
Cross-Optimized Discount Rate
Economic Assumptions for pension liability’s discount rates can be optimized with Liability Hedge Fixed Income Solution as part of a single optimization process. In this case Economic Assumptions for discount rate and Liability Hedge Fixed Income Solution will be cross-optimized.