Are pension actuarial services a commodity?
This question comes from the chief financial officer of a large U.S.-based corporation. The corporation has grown through acquisition and has multiple pension actuaries. The CFO is considering consolidating services with a single actuary. The CFO believes that pension actuarial services are a commodity–that is, there is little differentiation in the services that his organization receives from various current actuaries. He believes there is no difference in the numbers he receives from one actuary to the next. Each actuary provides the same funding limitations, annual expense, annual financial statement disclosure information, government filings in approximately the same time frames and at roughly the same cost. Consequently, he believes the work should be awarded to the lowest-cost service provider. The premise that all pension actuarial services are the same does not stand up to careful scrutiny, particularly when the impact of recent changes in pension law and accounting are consid
