Actuarial Adjustment

Don’t worry. An actuarial adjustment is not your change in pant size when you pigged out for three months and packed on a good twenty.

If you retire earlier or later than expected, your employer will change the payout of benefits you receive because the date of your retirement has changed. Let’s assume that you had planned on retiring at age 65, but changed your mind and retired at age 62. Your employer would perform an actuarial adjustment on your benefits. As a result, the amount you receive each year would be reduced, because the overall amount allotted to you is now based on a different, and greater, number of years.

This can also happen if multiple employees retire at the same, or close to the same time...and if you retire later than expected (in which case your payments would increase).