Submitted by: Submitted by tamara11
Views: 193
Words: 284
Pages: 2
Category: Business and Industry
Date Submitted: 01/10/2012 10:33 AM
http://www.wikinvest.com/stock/Eastman_Kodak_Company_(EK)/Pension_Postretirement_Benefits
Eastman Kodak Company’s benefit obligations for both their pension and postretirement are completely dependent on assumptions used by their actuarial consultants. The actuary reviews each assumption with the company yearly, so both the actuary and the company can factor in “discount rate, long-term expected rate of return on plan assets, salary growth, healthcare cost trend rate and other economic and demographic factors” into what could be the new rate for the companies benefit package. If there is a disagreement regarding the rates by either the actuary or the company then negotiations on how to maximize company profit while creating an appealing benefit package.
The actuary plays a major part in benefit packages; there is not any one specific way of calculating how an overall premium is figured. Numerous factors are involved in order for the bottom line of a figure. Both the company and actuarial firm need to be in agreement with the figures before they are publicly launched. Most occurrences the actuary is part of the companies firm which is easier to work rather than an outside actuarial firm which is dealing with several companies at one time. On occasion rates can take years to decide upon especially if the company who is 1) selling the benefit package, or 2) offering the package to its employees then the company wants to ensure that the Company is protected and is making a profit off the package from either the employee or customer. The company is wanting to protect itself and make money at the same time so it works closely with the actuary to ensure no other company has a similar product with comparable rates.