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By Adrienne Lieberthal, FSA, EA, MAAA, FCA, CERA, Founder & CEO, Athena Actuarial Consulting (ATHENA)
I keep coming back to something a pension director said to me after a panel at NASRA:
"We have made so much progress in establishing our first ERM function. The risk register looks good. We have colors to indicate likelihood and impact. We have owners. We have regular status updates. But I'm not sure if it's actually changed how we think about anything."
That conversation (and versions of it with our clients and industry partners) crystallized something I've been thinking about for years: Too often, enterprise risk management (ERM) becomes a governance exercise instead of a management tool.
Organizations create the artifacts. They check the boxes. And then nothing actually changes.
That missed opportunity is why pension actuaries should be at the ERM table; even, and perhaps especially, when nobody is asking for the annual valuation.
Here's what I believe: The role of the actuary is evolving.
The profession is moving beyond producing annual valuations and technical analyses. As technology and AI change how some of that work gets done, the actuary’s value increasingly lies not only in producing the analysis, but in interpreting it, challenging assumptions, understanding uncertainty, and helping leaders decide what to do with it.
Actuaries have always been trained to think about uncertainty over long time horizons. That's nothing new. What's changing is the pace of change, the complexity of the environment, and the decisions organizations need help making.
Historically, retirement systems’ recurring asks of their actuaries centered on the valuation: Is the plan adequately funded? What should the contribution be? Are the assumptions reasonable?
Today, the organizations we work with are asking different questions: What happens if we're wrong? Which assumptions matter most? Where are our biggest risks? What decisions are robust across multiple scenarios? How well do our assets align with the timing and characteristics of our liabilities? Where could asset-liability management inform better decisions?
Those questions require actuarial thinking that extends well beyond the annual valuation.
Actuaries are trained to understand that a projection is not a prediction. The expected outcome is only one possible future. What really matters is understanding the range of possible outcomes, what drives them, and which scenarios could materially threaten the organization’s objectives. Many traditional ERM processes stop at the risk register. Risks are identified, scored, color-coded, and assigned to owners. That work is important, but it can leave each risk sitting in its own box without examining how risks interact, compound, or emerge together under a common scenario. A pension system might track investment volatility in one category, demographic risk in another, liquidity pressure in a third, and contribution pressure in a fourth. Each may have a different owner and mitigation strategy.
But those risks are not independent.
A market downturn combined with demographic acceleration and contribution pressure doesn’t simply create three simultaneous problems. The interaction among them can create an entirely different risk profile—one that may test the organization in ways none of the individual risks would be on its own.
This is where the actuarial lens becomes particularly valuable. An actuary can help the organization ask: What happens when these risks compound? Which assumptions drive the outcome? How much time would we have to react? What are the early warning indicators? And what scenario could threaten the organization’s ability to deliver on its mission?
This broader risk discipline is also reflected within the actuarial profession itself. The Chartered Enterprise Risk Actuary (CERA) credential provides specialized training in enterprise risk management, including identifying and modeling risk, understanding interactions among risks, evaluating mitigation strategies, and incorporating risk into strategic decision-making. ERM is not separate from actuarial thinking; it is an increasingly important application of it.
A risk register alone cannot do that work. ERM becomes valuable when this thinking is integrated into how the board governs, how executive leadership makes decisions, and how both engage with their actuary.
The strongest ERM programs treat risk management as continuous work rather than periodic reporting exercises. They use scenarios to test strategy, revisit assumptions as conditions change, and ask difficult questions before decisions are made.
They also bring actuaries into conversations earlier—not simply to run the numbers on a decision someone else has already made, but to help frame the decision itself.
The difference shows the quality of board conversations, the organization’s understanding of its own vulnerabilities, and leadership’s ability to make decisions with confidence even when the future is uncertain.
Across our team’s work with retirement systems (producing valuations, conducting independent reviews and actuarial audits, and advising boards and executives), we’ve seen the difference between actuarial work that satisfies a requirement and actuarial work that meaningfully informs a decision. The technical analysis matters. But its greatest value comes when it helps leaders understand their choices before the decision is made which assumptions matter, where the organization is vulnerable, what tradeoffs it is making, and which strategies remain viable across a range of possible futures.
That belief that actuarial work should help organizations make better decisions, not simply produce better reports, is foundational to how we approach our work at ATHENA.
Retirement systems operate in an environment where uncertainty is unavoidable. Investment markets, demographics, workforce behavior, legislation, technology, liquidity, and stakeholder expectations can all affect whether the organization achieves its objectives.
The objective of ERM is not to eliminate risk. An organization that eliminated every possible risk would also eliminate its ability to accomplish anything. The better question is always: Which risks matter most? How much are we willing to accept? Where should we spend our limited resources? And which risks might actually be worth taking in pursuit of our objectives?
This is where actuarial thinking can change ERM from a reporting exercise into a decision-making discipline.
Whether your organization is just beginning the ERM conversation, establishing a formal function, or operating a mature program, ask one question:
Is your pension actuary at the table when you are identifying, evaluating, and making decisions about enterprise risk?
If not, that is a conversation worth having.
Because the role of the pension actuary isn’t becoming less relevant. It’s expanding, and organizations that use that expertise beyond the valuation will be better equipped to navigate uncertainty and make better decisions.
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By Adrienne Lieberthal, FSA, EA, MAAA, FCA, CERA
Founder & CEO, Athena Actuarial Consulting
Adrienne Lieberthal, FSA, EA, MAAA, FCA, CERA, is Founder and CEO of Athena Actuarial Consulting (ATHENA). She has more than 15 years of experience across pension, health, and risk management, including actuarial audits and independent reviews, mortality research, and work with retirement system executives and boards on complex strategic decisions. She holds the Chartered Enterprise Risk Actuary (CERA) credential, reflecting specialized expertise in enterprise risk management.
