Actuarial Valuations of Employee Benefits

We provide the full range of actuarial services to employers with statutory (or non-statutory) defined benefit (DB) plans in India. We work with a culture of providing all of our clients with a high quality, professional service through strong personal relationships and tailored solutions.

We are highly skilled at explaining our calculations and the options available in the most effective ways. We use our experience to offer pragmatic solutions whilst minimizing risks. We've developed innovative software tools to support our actuarial work. We are not afraid to challenge conventional approaches, and where we think it to be right and judge it to be in the client’s best interests.

Our actuarial team provides in-depth support and advice throughout the actuarial valuation process. Our cost-effective solutions save our clients' time and money, in what can otherwise be a lengthy & tedious process.

We inculcate full account of legislation, with our in-depth industry knowledge, and our close working relationship with clients ensures smooth delivery of reports and as a consequence, our clients get the best of services.

We never lose sight of the fact that our primary objective is to provide accurate liabilities and information to our clients in a timely and empathetic manner. To achieve this we take advantage of our technology combined with quality members of staff and robust processes, to deliver timely, accurate, empathetic services.

Specific expertise in our employee benefits actuarial practice.

Calculating Liabilities for Accounting for Employee benefits as per Projected Unit Credit Method

Actuarial liability is simply the money that the company sets aside periodically to meet the future benefit payments. This approach takes into consideration an employee’s current salary, the number of years to be served, years till retirement, annual rate of salary increment, probability of attrition and death, vesting period (if any) etc.

We employ Projected Unit Credit Method to value actuarial liabilities. The method estimates benefits that the employees have already earned based on the length of their employment and using assumptions (such as annual rate of salary increment), benefits payable in the future are projected. In other words, we can calculate the amount of benefit payable to the employee for each of his future service till retirement, with associated probabilities, and use a discount factor to reduce the expected benefits to its present value. Further, benefit is attributed to individual accounting periods under the plan’s benefit formula.

In the Indian context, post-employment benefits such as Gratuity, Pension, Post-Retirement Medical Benefit, Retirement as well as other employee benefits such as Earned Leave and Sick leave, the liabilities of which are of long term in nature require an actuarial valuation.

We evaluate client's plans and identify possible problems. We forecast each plan’s financial needs using state-of-the-art modelling techniques and software.

Our team brings combined experience of 50+ years in providing actuarial services pertaining to employee benefits. The experience and knowledge we have built, uniquely positions us to work with you in valuation & reporting of defined benefit plans.

Reporting under variety of accounting standards

We provide statutory actuarial valuation reports to enterprises with headcounts ranging from 10 – 100,000+ employees. We prepare actuarial reports under accounting standards such as IGAAP (AS15 Revised 2005), Ind AS 19 (Employee Benefits), IFRS (IAS 19 Employee Benefits), USGAAP (Accounting Standards Codification 715), NAS 19 (Nepal), LKS 19 (Sri Lanka) & global reporting to parent company. We provide clients with information required for financial accounting.

The team carries an in-depth experience in reporting for domestic & multinational clients and brings you the expertise you need to account actuarial liabilities in an effective, efficient and appropriate way.

Assumption Setting

The general requirements for setting the assumptions are ; actuarial assumptions shall be unbiased, and mutually compatible; financial assumptions shall be based on market expectations, at the balance sheet date, for the period over which the obligations are to be settled.

Actuarial liabilities are of long term in nature. Whilst choosing suitable assumptions it's imperative to take a long term view in setting financial assumptions such as salary increment rate as well as on demographic assumptions such as withdrawal (or resignation) rates.

We execute customized assumptions analysis using historical data for 3/5 years and we update these analyses every year when the valuation is executed. This way we assist you with appropriateness of actuarial assumptions and suggest changes given shifts in underlying demographic trends.

Designing of employee benefit plans

Some employers choose to provide higher levels of benefits than the statutory minimum. We assist our clients not only with the design of employee benefits but also with its financial impact. We execute the actuarial liabilities under multiple scenarios, along with future projections (based on current data) to illustrate incremental cost of maintaining such plans.

M&A Consulting

M&A is an integral part of a company's growth strategy. We can help you every step of the way.

We take due diligence to the next level with a fact-based, rigorously quantified assessment; calculating individual benefit values (e.g. defined benefit actuarial liability transfer values between one legal entity to another); bring an actuarial approach to complex decision problems, we can ensure that risk and uncertainty are modelled in full depth & evaluated according to multiple criteria; estimating the resilience and robustness of financial decisions; and assess the underlying data quality, models and reportable outputs.

We believe in good documentation, expert judgment, and can help to demonstrate the quality of your decision.

International Projects

We are scheme actuary to more than 100 companies across the geographies like Saudi Arabia, Nepal, Sri Lanka, Philippines, Egypt, Oman, Dubai etc. Our models and software are flexible and robust to project cashflows and estimate liabilities for all types of complex employee benefit plans across the geographies.

Contingent liabilities

We also provide actuarial estimates of contingent liabilities posed by warranties/guarantees attached with consumer goods and for liabilities posed by accumulated reward points on credit cards and warranties.