Actuarial Services

Expert data-driven analysis and financial assessment to help you develop the best strategies for your benefit programs

As an experienced actuarial firm, KBC has a 360 degree view of today’s ever-changing healthcare and pension landscape.  We specialize in active and post-employment benefits.  This allows us to provide the most accurate services and sound advice for our client’s health and welfare plans, including retiree medical benefits.  Our goal is to understand our client’s overall objectives and long term goals, and then provide them with timely, accurate information they need to create and manage sustainable benefit programs  for their organization and it’s employees.

Actuarial Services for Health Plans

Overview

  • Trend calculation and analysis
  • Funding and budget projections
  • Calculation of premium equivalent rates
  • Reserve setting (IBNR & claim stabilization)
  • Premium stabilization reserves
  • Evaluation of cost-to-value stop-loss levels

Actuarial Services for Pensions & Other Benefits

Overview

What is an Actuary?

Actuaries analyze the potential cost of uncertainty, mostly to mitigate risk and minimize loss. Using statistical and mathematical models, they predict and quantify outcomes for their clients.

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Although health care is the most common benefit, KBC offers actuarial services to include other benefits such as sick leave, paid time off (PTO), salary continuation plans and health reimbursement accounts. With changes in regulations and development of professionals and resources, KBC has grown to be a leader in the actuarial valuation of post-employment benefits (OPEB, pensions and supplemental pensions). KBC specializes in valuations for public employers in compliance with Government Account Standards (GAS).

 

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What Is OPEB?

OPEB is defined by GASB as any post-employment benefit other than pensions or compensated absences.  This can include healthcare benefits, dental, vision and life as well as continued insurance coverages or HRA contributions used for premium reimbursements or other eligible expenses.

 

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Any employers that participate in single-employer or agent multiple-employer defined benefit OPEB plans are required to measure and disclose an amount for annual OPEB cost on the accrual basis of accounting.  KBC’s actuarial valuations not only include all necessary disclosures, notes to the financial statements, and required supplementary information, but also include additional exhibits that provide a variety of benefits to our clients.  These exhibits are modeled directly after the examples provided within GASB’s statements making them both easy to understand and easy to use without need for further modification by the government entities and/or the auditors.

 

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GASB Statements

Key Benefit Concepts is a leader in the interpretation and implementation of

GASB Statements pertaining to post-employment actuarial valuations.

403(b) Recordkeeping

KBC provides valuations of post-employment benefits as well as consulting services to evaluate and restructure post-employment benefits. In this process, we have found government entities that find it more appropriate to provide a non-elective 403(b) contribution/plan. Some include an annual employer match with a vesting schedule. The amount of contribution or match may increase based upon the employees’ years of service. Out of a need for good record keeping, KBC has expanded its pension services to include such post-employment 403(b) recordkeeping. Please contact us if your organization is interested in this service.

GASB Statement 74 & 75

GASB Statement 74 and 75 recently replaced the GASB 43 and 45 Statements as they relate to accounting of OPEB.

KBC has been coordinating the transition of the valuation process, services, and accounting with our clients and their auditors. In preparation for a smooth transition to the new requirements, KBC has modified the actuarial method used to entry age normal and is able to provide valuations based upon current requirements or early (or now current) compliance with the new Statements.

You will find that our reports are extremely thorough and easy to read. We welcome the opportunity to provide a proposal for your next valuation.

Funding Projections

As part of the post-employment benefit actuarial valuations, we include a 30-year pay-as-you-go projection of expected cash flow.

The Government Accounting Standards Board (GASB) requires public entities to identify and include their post-employment liability in their financial statements. At this time, however, GASB does not require public entities to fund this liability.

 

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Since many government employers currently provide for post-employment benefits on a pay-as-you-go basis, we include in our valuations an illustration of the expected projected pay-as-you-go based upon the assumptions used in the valuation. Furthermore, we have been able to aid our clients by using the cash flow projection as a benchmark to compare to the expected cash flow impact of plan design considerations. This allows the public entity to determine whether the change in expected cash flow will yield the outcome they are looking for and whether the revised benefit is sustainable over the long-term.

 

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Other Actuarial Cash Flow Projections

There are many other types of benefit obligations and cash flow projections that can be determined such as sick leave benefits earned, expected rates of payout, and whether it be at termination or retirement.

 

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Similarly, we can determine projected lost wages, 401(k) or 403(b), or pension benefits due to illness or injury.

 

Cash flow projections can be provided for many types of benefits identifying costs of benefits earned, expected benefits earned into the future (with or without assumptions of new hire replacements), and rates at which such benefits would be paid out.

 

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