Over the course of her 25-year career as a pension actuary, Peggy McDonald says she has seen the rise and fall of the traditional pension plan as the cornerstone of an employer’s retirement offering.

“By the end of my time in pension consulting, my clients didn’t want to talk about plan design anymore,” McDonald says. Instead, they were worried about the liabilities asssociated with plans, she says.

Now serving as SVP and actuary in pension risk transfer at Prudential Retirement, McDonald helps plan sponsors solve their pension concerns. “Every new deal brings a new challenge that we have to innovate around,” she says.

McDonald, who grew up in a suburb of New Haven, Conn., still lives in the house her father built 65 years ago. She hadn’t really been aware of the actuarial career path until after she graduated from Smith College with a degree in economics. “If I had heard about the actuarial career at a younger age, I would have been a math major,” she explains.

Soon after college, McDonald lost both of her parents and learned that her 2-year-old nephew had cancer. “It was a very difficult, time in my life,” she says. “I was trying to find something fun to do while wrestling with all these illnesses and death -- and I thought I’d try to pass an actuarial exam,” she says.

To prepare for the exam, she signed up for a linear algebra course at a local college. During the first class, she happened to sit next to another student whose father owned a pension consulting business called the Pension Service. “By the second class he offered me a job,” she says. “So that’s how I sort of fell into the career.”

Actuarial science has changed a lot since McDonald started her career. “At the beginning, there were very few women actuaries,” she says. Rather than a challenge, “to some extent, it was an advantage,” she says.

Following her first job at the Pension Service, McDonald went on to work at Hewitt (now Aon Hewitt) consulting for about three years until she became pregnant with the first of her three children. So she returned to the Pension Service. She continued to work there for another six years while her children were young. “If I’m really honest, the biggest challenge has been work-life balance,” she says. “But that’s a challenge most parents face.”

In 1996, when her kids had grown older, McDonald started working in Cigna’s pension division. After Prudential purchased Cigna’s retirement and investment-products division, McDonald remained at the company for another two years before taking a position at Towers Watson, a global professional services company based in New York City. “I was really doing the same thing there, just with larger clients,” she explained.

Her career took a turn when Phil Waldeck, the senior vice president, head of pension and structured solutions at Prudential, asked her in 2010 to return and join the company’s pension risk transfer team. “When I spoke to Phil and saw this opportunity, I took a chance and left a successful retirement actuary career to try this,” she said. Since then, she hasn’t looked back. “I really believed in the need for pension risk transfer,” she said.

Since returning to Prudential, McDonald has helped execute the first pension buy-in — when an insurer takes on a pension in exchange for a premium payment — transaction in the United States, a $75 million agreement with Hickory Springs Manufacturing Company. She has also worked on deals with GM, Verizon. Motorola Solutions and Bristol-Myers Squibb. Her team, she says, has been crucial.

“We have built out our pension risk transfer team with a lot of really smart, creative, people from differing backgrounds,” she says. “Honestly, the key to my success is really the team that’s around me.”

 

 

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