Government Pension Plans in Focus: Is the Plan Actuarially Sound?

If stakeholders in a government entity’s pension plan were told that the plan is actuarially sound, they would probably believe that a simple, clear definition of actuarial soundness is known and understood by all actuaries and that every actuary would agree that the plan is in good financial shape. But a word or phrase can have different meanings depending on the context, and actuarially sound is no exception. This article examines how the simple phrase “actuarially sound” can be a source of confusion for government entity stakeholders, and it provides more specific questions to follow the first critical follow-up question: In what context?

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Category: Retirement Plans