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Module Overview

There are lots of ways that pension boards can manage their pension debt well, and lots of ways they can make mistakes. Managing the accounting and finances of a defined benefit guaranteed income plan can be done — there are a few well funded pension plans to prove it — but is also a highly complex practice with lots of ways that things can go wrong.
This module will cover key actuarial assumptions and methods that pension boards have to made important decisions about:
  • Amortization Policy — methods for designing a payment structure for unfunded liabilities
  • Payroll Growth Assumption — an actuarial assumption about how much employees will earn
  • Money Measurement — how to define the value of assets under management
  • Asset Allocation — how assets under management are actually invested
A previous module has already covered the assumed rate of return (the most important actuarial assumption), so we won’t cover that again here.