Actuarial Sustainability

Our Lens

Many ESOP companies perform repurchase obligation studies in an infrequent manner. While this is important, sustainability is more important and that generally remains unaddressed. Based upon our expertise as actuaries who ran an ESOP, we believe that ESOPs mimic pension plans, primarily due to the guarantee of payments. Our lens is different than many in the industry.

Study the data

We focus on the following areas:

• Setting actuarial assumptions using actuarial techniques
• Modeling volatility in the repurchase obligation with Monte Carlo analysis (otherwise known as stochastic mathematics)
• Calculating a true cost of the ESOP that takes into account of the future such as stock appreciation and timing of payments
• Create a funding policy that provides long-term cost stability