No, but you don’t have to bill by the hour either.
$5,000 for the first 3 participants, $200 / participant for participants 4-20, $75 / participant for participants 21-250, $2 / participant for participants 251+
Or something like that. I pulled those numbers out of my butt so it’s very likely they’re not reasonable, but approximate what IS reasonable. Extra $2,000 charge for Taft-Hartley plans, and extra $1,000 for plans with this other complicating factor that twig hasn’t even thought of…
And figuring out if this fee structure is reasonable how? Magic?
So the big consulting firms are doing it all wrong and you geniuses have the answer.
Retrofit it to your current base of clients and labor pool. If you’ve been billing by the hour for the last 20+ years then you’ve got 20+ years of data you could regress on.
Brainstorm with your co-workers what plan characteristics generally mean extra time and model on those (higher benefit before participants hit SSNRA perhaps? I dunno, just spit-balling).
Then you could publish a fee schedule so your clients could know going in what you’re going to charge them. Maybe that’s valuable to some clients. 
Note… I’m not saying this is definitely a superior method to simply charging by the hour. But it’s an alternative that’s commonly used in different but similar fields. It’s not like charging by the hour is the only possible way.
Im not saying we charge by the hour. We have a fixed fee for recurring work and charge by the hour for other work. Im sure they use something like what you are saying to initially set fees. If you’re using past hours why are you arguing to stop tracking hours entirely? Im talking about why we track hours. Its to measure profitability. Why would you flat out stop and rely on the past?
Because sometimes it’s easier. Sometimes it’s fairer. Some employees don’t like tracking billable hours so you have happier employees. Tracking the hours takes time too, cutting into productivity. (Estimating hours also takes time if you do it well, so there’s a tradeoff.)
When I discovered that a particular reinsured life had a material error in the calculation of the ceded reserve I spent a lot of time figuring out why. None of that was billed to the client, and it wouldn’t have been reasonable to do so. It turned out we had a systemic error buried in some SQL code that was being run by a SAS program. I spent a lot of time figuring out and fixing the error and then dotting all of the i’s and crossing the t’s and getting the correct cover sheets on the myriad of TPS reports that IT required to get that fix through to the places that mattered. But it was fixed and documented. The cost of my time was spread across all clients, which was surely fairer than billing it all to the one for whom I happened to notice the error.
Like I said, for pension consulting work maybe hourly IS the optimal way to go. But it’s not the only option.
No, he said:
So a 5 participant plan would pay $1,125 and a 200,000 participant plan would pay $21,000.
ETA: Oops, I see this was covered.
how complicated a client’s plan is, and data is and everything else about them is not the same for all clients. you’re claiming we should set a formula, stay with it, and never revisit if it’s profitable. so, rely on past experience and fuck future experience.
i responded prior to him saying that. we were typing at the same time. yes, i know. you can’t just arbitrarily assign fees and not track if it’s profitable.
tracking hours is the optimal way to go to measure profitiability in pension consulting. i’m not claiming we enjoy it.
You’ve correctly highlighted some of the problems with pensions. But there is an undeniable risk-pooling benefit.
Suppose that you & I know that one of us will drop dead at age 70 and the other will live to be 110. But we don’t know which one is which. And we’re not sharing our money. Now we have to both plan and save and spend as if we’re going to live to 110, just in case we’re the person who does. But if we pool our money then we both have more to spend while we are alive because we each only have to save half of what we’d need to live to 110.
And I suspect that even with fees and bad investments (individuals make bad investments too, by the way) we’d individually come out ahead with a pension due to being able to pool the risk of living to 110.
Talk about high class problems
Whoa, no, not even close.
Pricing actuaries literally spend their entire careers doing exclusively this. (If they spend their whole career in pricing, anyway.)
Some of that is estimating claims costs rather than overhead, of course. But the overhead costs are continually revisited. And not by calculating billable hours.
No one is remotely suggesting this.
Arent you pricing for one company, your own rather than thousands of clients that get billed individually?
How are you suggesting tracking if a client is profitable then?
Well yeah, it is a risk.
If you knew for certain the exact date you (and your spouse if you’re managing your money jointly) will die then you will have more money to spend than if you assume you’ll live to 110.
On the other hand, if you assume that you’ll die at 85 and you end up living to 110 then you’ll run out of money… that is in fact a very real risk.
Twig etc apparently has the answer as to how to run a pension consulting firm better than those who have done it for decades.
I don’t understand your question.
I dont understand what you’re proposing for tracking profitability of individual clients if we are ditching tracking hours worked on said client as you’re proposing we do