What is the role of actuary methodologies in Defined Benefits Plans?

The role of actuary methodologies in Defined Benefit Plans is primarily focused on determining the defined benefit based on specific assumptions and the trust assets that are available to meet future obligations. Actuaries use statistical analysis and financial principles to calculate the present value of future benefit payments, considering factors such as mortality rates, retirement age, and interest rates. This ensures that the plan can adequately fund the promised benefits to participants.

By utilizing these methodologies, actuaries also assess the plan's funding status and help in formulating strategies to manage risks associated with pension liabilities. This is crucial for maintaining the financial health of a defined benefit plan over the long term, ensuring that the promises made to retirees can be met.

The other options do not accurately reflect the primary function of actuaries in the context of defined benefit plans. Managing daily contributions pertains more to administrative aspects rather than the actuarial calculations necessary for benefit determination. Eliminating the need for retirement planning is misleading, as the purpose of the plan is to provide for retirement. Simplifying tax compliance also does not capture the essence of actuarial work, which is more focused on long-term benefit calculations rather than tax-related functions.