Case Study

SBA delivered the following scope of services:

• Gathered detailed information on the three plans
• Worked with the Retirement Committee to foster an understanding of the pension termination process as well as all the factors that play into a plan termination (e.g., interest rates, data quality, plan provisions, etc.)
• Reviewed plan documents, funding levels, data quality, and other key data that play into a termination decision
• Calculated and analyzed the liabilities and financial aspects of each of the three plans to assess the feasibility of termination
• Analyzed the plan provisions with a particular focus on the lump sum payment and other methods to reduce the participant count and associated liabilities
• Analyzed data quality and the termination readiness of each of the plans
• Developed a realistic time line of events, including all required notices to the various parties of interest
• Developed alternative recommendations for dealing with the three plans while the plan sponsor waited for the optimal economic and plan funding conditions for the given situation

Through education and actuarial analysis, the Retirement Committee was put in a position to make educated decisions about the future of the plans. Although economic conditions and the plans’ financial position did not favor plan termination, a strategy was created and put into action that could lead to a situation where termination is possible.