The main purpose of an actuarial valuation is to inform plan sponsors of the amount that must be provided each year to properly finance benefits. Consequently, the first step is to take appropriate measures to ensure that actuarially determined contributions are paid faithfully to the plan each year. Actuarial valuations are subject to various accounting standards, such as IND AS 19, AS-15 (R), US-GAAP, IFRS, etc. Under these accounting standards, actuarial valuation is carried out to estimate liabilities and establish related provisions in the balance sheet.
An actuary performs the actuarial valuation of various benefits, such as tips, vacations, pension funds, and provides the estimated liability and associated disclosures that must be reported in the company's financial statements. An actuarial valuation is an analysis carried out by an actuary that compares the assets and liabilities of a pension plan. Actuarial valuations are necessary to assess the long-term sustainability of a defined benefit pension plan and can serve as a decision-making tool for plan sponsors. Numerica is an independent consulting firm with a new perspective and setting new standards in analysis, actuarial services and financial IT.
The second set of actuarial valuations (GASB valuations) is used to determine how accountants account for pension costs. A lot of time and effort is spent selecting each actuarial assumption so that the TRAF can estimate the plan's future financial situation. The tip case is very simple: if you have more than 10 employees, the Tip Payment Act comes into effect and you will most likely need an actuarial valuation. We offer a full range of actuarial services including the actuarial valuation of tips, vacation and pension plans.
The results of the TRAF actuarial valuation have several components that can be explained and summarized as follows. The first set of actuarial valuations (fund valuations) is used to determine the financial health of pension plans and how to finance them. All types of companies, regardless of their shape and size, have expressed a desire to understand the regulatory framework under which actuarial valuations are conducted. The TRAF conducts stress tests and sensitivity analyses on key assumptions to understand the impact of experience that deviates from actuarial assumptions.
See the discount rate that will be used for the actuarial valuation of benefit plans according to AS 15, Ind AS 19 and other types of actuarial and financial analysis. The Numerica team is made up of professional actuaries, from top-level educational institutes and with diverse international experience. For example, finance valuations use an actuarial value of assets to determine unfunded liabilities, which soften over a 5-year period, while GASB valuations use the market value of assets, which is not softened.
