How often does GFOA recommend that an actuarial experience study be conducted?

The Government Finance Officers Association (GFOA) recommends conducting an actuarial experience study every five years. This recommendation is grounded in the need for pension funds to ensure that the assumptions used in their actuarial valuations remain valid over time. As demographics, economic conditions, investment performance, and other relevant factors can change, regular experience studies help to align actuarial assumptions with current realities, enhancing the accuracy and reliability of pension funding and management strategies.

Conducting the study every five years strikes a balance between being frequent enough to monitor changes effectively, while also allowing sufficient time to evaluate trends. This timeframe helps pension plans make informed decisions regarding contributions, benefits, and funding policies, ultimately supporting the long-term sustainability and health of the pension fund.