Retirement Account First Quarter 2012

February 27, 2012

Retirement Account is the Pension Practice Council’s quarterly email newsletter designed to keep you up to date on Academy public policy activity in the pension arena. Featuring short descriptions of—and links to—recent practice council work products, including comment letters, practice notes, publications, and legislative outreach, Retirement Account provides you with a quick update to supplement the detailed reports on pension activity that you already receive each month in the Actuarial Update and each quarter in the Enrolled Actuaries Report.

If you have any questions, suggestions, or comments about Retirement Account, please contact Jessica Thomas, the Academy’s senior pension policy analyst, at, or Olivia Marshall, the Academy’s managing editor for member publications, at

Comments on Regulatory Issues

The Pension Committee in a Feb. 16 letter to the Internal Revenue Service (IRS) and the Department of the Treasury recommended that plans be given greater flexibility for electing when to reduce funding balances. The committee wrote that the end-of-year deadline for voluntary funding balance reductions is unnecessarily restrictive and could cause substantial hardship for plan sponsors that, for various reasons, miss the deadline. It also made several recommendations for extending the deadline and suggested that an alternative to reversing the regulatory position would be to permit under certain circumstances standing elections to reduce funding balances.

In a Jan. 30 letter to the IRS and the Treasury, the Pension Committee addressed recent comments by the IRS about reductions in Internal Revenue Code (IRC) Section 415(b) limits for early commencement and optional forms of payment. The comments, which were made last fall by IRS representatives at meetings held by the Conference of Consulting Actuaries and the American Society of Pension Professionals and Actuaries, differed substantially from the widely held understanding of the practitioner community, the committee wrote. The committee requested clarification on the IRS position and asked that any changes to current practice be promulgated in a proposed regulation and applied once the regulation is finalized.

The Multiemployer Plans Subcommittee offered several suggestions to address ambiguities or unintended consequences arising from provisions in the Pension Plan Protection Act of 2006 as they pertain to multiemployer pension plans. The suggestions were detailed in an Oct. 26 letter to the Pension Benefit Guarantee Corp. (PBGC). One of the examples given by the subcommittee was the prohibition against reducing the contribution rate which, in some situations, actually could result in reduced aggregate contributions to a plan. The letter was a follow-up to meetings the subcommittee members had with officials from the PBGC and other federal regulatory agencies last summer.

Important Regulatory News

The Department of Labor has made important changes to the 2011 Form 5500 Schedule SB line 25 instructions and the Schedule R line 8 form and instructions. Practitioners can download the 2011 Form 5500 at:

ASOP Drafts Exposed

The Actuarial Standards Board (ASB) recently approved an exposure draft of ASOP No. 4, Measuring Pension Obligations and Determining Pension Plan Costs or Contributions, and a second exposure draft of ASOP No. 27, Selection of Economic Assumptions for Measuring Pension Obligations. The comment deadline for both drafts is May 31, 2012. The Pension Practice Council is reviewing the drafts and will be providing comments to the ASB.

SSAPs No. 92 and No. 102 Exposure Drafts Reviewed

In a Dec. 9 letter to the National Association of Insurance Commissioners (NAIC), the Academy’s Pension Accounting Committee and the Joint Committee on Retiree Health of the Health Practice Council/Pension Practice Council commented on the exposure drafts of Statements of Statutory Accounting Principles (SSAP) No. 92, Accounting for Postretirement Benefits Other than Pensions, and SSAP No. 102, Accounting for Pensions. These exposure drafts are intended to replace existing standards governing accounting for pension benefits and postretirement benefits other than pensions.


Upcoming Events

2012 EA Meeting
March 25–28
Marriott Wardman Park Hotel, Washington

Join us at the 37th annual Enrolled Actuaries Meeting—the year’s best opportunity to network with other actuaries, exchange ideas, pose questions to speakers, and interact with government representatives—and earn up to 18 hours of continuing education (CE) credit. This year’s meeting features more than 60 sessions on various aspects of pension plan funding and administration, new rulings and regulations, and professionalism issues.

2012 Pension Symposium
March 28–29
Marriott Wardman Park Hotel, Washington

Participate in a highly interactive discussion of key retirement issues immediately following the EA Meeting and earn additional CE credits.

For more information and to register for the EA Meeting and Pension Symposium, go to

Upcoming Publications

Campaign 2012: A Guide to Analyzing the Questions Candidates Should Answer About Social Security
In 2008 it was projected that by 2041 the Social Security Trust Fund will be exhausted and income will be insufficient to satisfy promised benefits. Four years later, the shortfall is now projected to arrive five years earlier—in 2036. Every voter should be asking policymakers how they plan to address this major issue that affects all Americans. The 2012 Social Security campaign guide—which will be released in March—examines the major challenges the program faces and looks at some of the proposed solutions that could sustain Social Security for generations to come.

The Social Security Committee soon will be completing a new issue brief, The Significance of Social Security Trust Funds. The trust funds often have served as the centerpiece of partisan debates over the very nature of the Social Security program. Frequently in these debates, many of the important purposes and fiscal implications of the trust funds are overlooked. This issue brief addresses various perspectives on the trust funds and answers many of the questions that have been raised over the last several decades on this always-relevant topic. Look for the issue brief later this spring.