Actuarial Adjustment

DEFINITION of 'Actuarial Adjustment'

A revision made to reserves, premiums and other values based on a company's actual loss experience as well as expenses and expected benefits to be paid.

BREAKING DOWN 'Actuarial Adjustment'

In pension arrangements, actuarial adjustments are made to the retirement benefits when an individual retires before or after normal pension age. The most common actuarial adjustment is an actuarial reduction made to retirement benefits when a member retires before the normal pension age, which takes into consideration the additional years the member is expected to receive benefits.