PBI Actuarial Consultants Ltd.

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Headquartered in Vancouver, with offices in Montreal and Toronto, PBI Actuarial Consultants Ltd. provides pension, group benefits, and investment consulting services, creating cost-effective, innovative solutions to fulfill clients’ pension and benefits needs. PBI focuses on providing advice to assist clients with the management of their pension and benefit plans, including prudent investment of the plans’ assets in order to best meet the promised benefits under the plans. Risk management strategies are created to ultimately protect the benefits of plan members.

At the core of any actuarial practice lies the science of mathematically evaluating the probability of events, and quantifying the possibilities into contingent outcomes. The end goal is to minimize financial losses associated with uncertain, undesirable events. In other words, actuaries assess the risk associated with certain events so that plan sponsors can make educated, informed decisions best suited for their plans and their plans’ members.

The Canadian Business Journal spoke with Tony C. L. Williams, President, and Cynthia Rynne, Senior Consulting Actuary, discussing what actuarial, pension, and investment consulting is all about.

Pension Facilitators

“The key at the end of the day is to ensure that there are sufficient assets to cover the liabilities, or benefits, of the pension plan,” explains Rynne and continues, “it’s important to not only look at the current state of the plan, but to also take a futuristic approach by looking at possible scenarios and probabilities of future events, as pensions are paid far out into the future. Objectives of plans include benefit adequacy, affordability and security, all of which need to be carefully balanced in order to pay out the promised pensions to members.”

While math lies at the core of the actuarial business, in today’s pension environment consulting actuaries need to offer more than just a formula or mathematical equation. It requires “outside-the-box” thinking, strong communication skills, an understanding of the perspectives of all stakeholders of the plan, and a trusted partnership with their clients, to name a few other non-mathematical skills required of actuaries. All of these skills are required in order to create and implement the best strategy to meet the client’s long-term plans. PBI professionals offer extensive experience in plan design, funding, administration, documentation, regulatory issues, investment policy design and review, strategic implementation, risk monitoring and risk management.

“Simply put, what PBI is truly about is being problem solvers and advisors to boards of trustees, plan administrators, and the like, concerning the risk, options and best solutions for them to fulfill their obligations. It’s about becoming a trusted advisor in these issues,” says Williams.

While many professions and businesses must project into the future in their line of work, what makes the actuarial profession unique is the fact that there is no room for failure. “Peoples futures and well-being are dependent on sound financial planning, so failing is not an option for us,” says Rynne.

The firm currently serves many large pension funds (between $500 million and $5 billion) sponsored by unions and managements, with the total assets of all PBI clients totaling approximately $25 billion. “We work with our clients on different mandates, but most of our clients are long-term relationships, and we have served these clients for as long as 20 years,” says Williams.

Pension Advocates

Pension plans are crucial to Canadians, yet around 60 per cent of Canadians are not a part of any pension plan. Williams says, “We are working for the 40 per cent that do have a pension plan, but we also want to see more people have entitlement to pension benefits so they can enjoy a more secure retirement. We see our role in the industry as having two mandates. One, we want to expand our own business, creating solutions for our clients, but we also participate in industry organizations (Canadian Institute of Actuaries, International Foundation of Employee Benefits, Canadian Pension and Benefits Institute, Pension Investment Association of Canada, etc.) focusing on issues related to pensions, and the overall health of the pension system in Canada. Through these organizations, as well as on our own, PBI works with the government, lobbying for legislation that will improve pension coverage in Canada.”

As to the existing system, according to Rynne, traditional defined contribution and defined benefit pension plans have been coming up short in a number of ways, and PBI is dedicated to finding alternative, innovative solutions that will help both employers and employees.

“For example, right now there is a lot of debate whether the CPP should be expanded, whether Target Benefit Plans should be promoted, whether shared risk plans should be explored further, etc. This is a very exiting period with many changes in our industry, and we see many opportunities to help the overall Canadian retirement system, and see it grow,” says Williams.

The Target Benefit Pension Plan represents a new opportunity for Canadians and PBI, and the firm and other industry professionals came to a consensus that this form of plan may be the best solution for the future for many employees and employers alike.

Clients

The Teamsters Canadian Pension Plan is one of PBI’s largest clients, with about $900 million in assets, and several thousand members. This plan’s focus is on fixed income investments, with a strong drive towards risk management. “Interestingly, even though interest rates and bond yields had fallen over the last 30 years, they were able to pay their benefits but also earn a high rate of return. For such plans we always work to create innovative solutions, and in this case, we collaborated with Stonebridge and created an Infrastructure Debt Fund, a fund very suitable for such a large pension plan which gives a good rate of return at quite a secure level,” says Williams.

While PBI realized strong growth in its first six years (26 per cent revenue growth in 2013 alone), Williams sees much more potential in the Canadian market, especially in Ontario where the Toronto office was recently opened. He would also love to see further expansion out east so that PBI can reach coast to coast. The firm’s core values upon which the clients are served, unique expertise, and strong market position will all provide many new opportunities for expansion of PBI across Canada. 

www.pbiactuarial.ca

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