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"Actuarial Assumptions and Their Impact"
Georgia Public Pension Trustees (GAPPT) Conference
September 21, 2011, Jonathan T. Craven ASA, EA, MAAA, FCA
While actuaries work from a variety of educated assmptions in order to make recommendations about pension plan funding, the most powerful assumption is the investment return assumption (also known as the discount rate). Should your system lower its discount rate assumption? This presentation discusses the factors to consider in making that decision.
"Discount Rates and Plan Termination Costs"
NCTR Directors Meeting
June 2011, by Pat Beckham, FSA, MAAA, EA, FCA
When we make actuarial assumptions, we're blending art and science. The most powerful assumption is the investment return assumption (also known as the discount rate). Many systems are now adopting lower discount rates. This presentation explains what's driving that trend, the impact of actuarial standards of practice on choosing a discount rate, and the role of inflation. The second half of the presentation deals with making the decision to close a defined benefit plan. Topics such as unfunded actuarial liability, GASB requirements, and funding policy are discussed.
"You Want Me to Do What to My Balance Sheet?"
2010 NCTR Annual Convention
October 11, 2010, by John Garrett, ASA, FCA, MAAA
The latest GASB Preliminary Views (PV) document reexamines current pension accounting standards contained in GASB Statements 25 & 27, including underlying principles and the separation of accounting and funding. The presentation questions the dramatic shift in GASB's thinking and provides an example of the possible impact to an employer's balance sheet based upon the current understanding of the PV.
"Understanding an Actuarial Valuation Report"
Georgia Association of Public Pension Trustees
September 2010, by Ed Koebel, EA, MAAA, FCA
For anyone who has to read actuarial valuation reports, this presentation explains in everyday language what can be the sometimes arcane and dry world of assessing actuarial experience and projecting the future. After reviewing this presentation, you will better understand funding requirements, assets, gain/loss, GASB accounting and assumptions.
"Actuarial Projections Related to Sustainability"
P2F2 - Public Pension Financial Forum
September 2010, by Eric Gary, FSA, FCA, MAAA
Overview of how actuarial projections relate to a system's sustainability. The presentation reviews key actuarial concepts (such as actuarial projections, present value, and actuarial present value). Reviews deterministic vs. stochastic projections and provides participants with suggestions on modeling. After reading this presentation, you will be able to:
- Identify key actuarial and modeling options
- Develop a plan and a model to improve your system's actuarial analyses
"Actuarial Magic? Actuarial Value of Assets & Other Mysteries"
31st Annual Police Officers' and Firefighters' Pension Trustees' School
May 2010, by Jose Fernandez, ASA, EA, MAAA, FCA
Examines the relationship between benefit policy and funding policy. By considering how future assumptions are made and the role of actuarial check-ups, you can better understand the fundamentals of actuarial valuations and plan sponsor liabilities. Also discusses common mistakes by the media in describing the funded status of plans and reviews asset valuation methods for public retirement systems. Finally, Jose shares his view of the economic recession, the market decline and possible timing of the recovery.
"Counter-Cyclical Contributions"
NCTR Annual Conference
October 2009, by John Garrett, ASA, MAAA, FCA
Discussion of an approach to developing contribution rates that produce a pattern of rates from year to year that are counter-cyclical to the current approach. The approach recognizes the correlation to poor market performance with tightened state budgets commonly resulting in retirement systems requiring contribution increases simultaneously with necessary reductions in state budgets. The approach considers a method that would reduce or stabilize contribution rates in difficult economic times while requiring contribution increases after market recovery and better than expected investment performance — typically correlated with the periods when state budgets are less restricted.
"Actuarial Principles"
NCTR Trustees' Workshop
July 2009, by John Garrett, ASA, MAAA, FCA
Workshop provided to familiarize trustees with actuarial terms and concepts.
"Maintaining Perspective"
NCTR Directors' Meeting
June 2009, by John Garrett, ASA, MAAA, FCA
Discussion of maintaining a long-term perspective on the funding of public employee retirement systems in light of recent significant market losses.
"Reducing Contribution Volatility"
Public Pension Financial Forum (P2F2)
October 2008, by Edward A. Macdonald ASA, MAAA, FCA
The root cause of contribution volatility is actuarial experience that varies from expected. And the main source of experience swings is actual investment returns compared to the long term expected rate. Good or great actuarial experience leads to contribution reductions and/or benefit improvements. Bad actuarial experience leads to increased contributions with limited ability to reduce benefits.
What if it would be possible to:
- Increase contributions during good economic times
- Reduce contributions during bad economic times
- Retain actuarial gains to offset losses
- Maintain actuarial soundness, and
- Comply with GASB and actuarial standards of practice?
It's possible with a patent-pending method for interest rate smoothing. Learn the details of the method and read two case studies demonstrating the impact the method has on pension plan contributions and funding status.
"Financial Economics"
Florida Public Pension Trustees Association
October 2009, by Jose Fernandez ASA, EA, MAAA, FCA
Explains financial economics (a branch of microeconomics concerned with the workings of financial [capital] markets) and its potential impact on retirement systems.
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