Actuaries are business professionals who analyze the financial consequences of risks and study uncertain future events using mathematics, statistics, and financial theory.
Actuaries are vital for establishing the foundational assumptions that allow pension plans to support their members and retirees. When a person becomes a member of aplan, it is difficult to predict the individual events that will affect the course of their life; systems do not know when they will retire, how much they will earn by the end of their career, or how long they will live after retirement. However, pension systems have many members, and as the numbers grow the average outcomes become easier to predict. Actuaries can then use these averages to establish reasonable assumptions, predict likely outcomes, and advise pension trustees and administrators, who have a fiduciary duty to make prudent decisions that serve pension members and retirees.
Texas public pension systems are required to hire qualified actuaries based on certain standards established in Section 802.101(d), Texas Government Code. These qualified actuaries must be either be a fellow of the Society of Actuaries, a member of the American Academy of Actuaries, or an enrolled actuary.
The pension plan’s actuary will:
The PRB also has actuaries. One member of the board must be an actuary, and the staff actuary performs several important functions in line with the agency’s mission.
The PRB staff actuary will: