Recent Council Activities
Meeting with GAO
Pension Committee Chairperson Mike Pollack, Vice Chairperson Ellen Kleinstuber, and Senior Pension Fellow Don Fuerst met with the GAO on Jan. 11 to discuss a study being conducted at the request of Sen. Tom Harkin (D-Iowa), Rep. Richard Neal (D-Mass.), and Rep. George Miller (D-Calif.). The study will provide a review of the current system of pension reporting and disclosure applicable to private retirement plans under ERISA, focusing on the system’s usefulness and areas of duplication.
Comments to IRS
The Pension Committee sent comments on Feb. 5 to the Internal Revenue Service regarding the notice requirements under Section 101(j) of ERISA promulgated in Notice 2012-46.
Revisions to ASOP No. 25
In December, the Pension Committee responded to proposed revisions to Actuarial Standard of Practice (ASOP) No. 25, Credibility Procedures. The comments to the Actuarial Standards Board focused on the exposure draft’s expanded scope and raised concerns regarding the standard’s application to pension practice.
Guide to Social Security Reform
The Social Security Committee released A Guide to Analyzing Social Security Reform in December. Written for the general public, policymakers, and the media to use as they evaluate Social Security reform proposals, the guide poses questions ranging from financing to benefit levels that should be considered when policymakers put forth specific proposals to change the Social Security system.
Social Security Means Testing
The Social Security Committee in December released an updated version of its 2004 issue brief on means testing for Social Security. Means testing is a reform option under which benefits for wealthy and/or high-income participants and beneficiaries are reduced or eliminated as a means of lowering costs. The issue brief considers the challenges posed by means testing as well as alternative reforms.
Social Security Webinar
The Social Security Committee’s Nov. 27 webinar, Social Security: Actuarial Status and Assumptions, attracted more than 300 attendees. The webinar focused on the assumptions used to evaluate Social Security’s financial condition and provided an overview of the actuarial status of the program based on the 2012 Social Security Trustees Report. The audio of the presentation is available here.
Model Funding Policies and Practices
The Public Plans Subcommittee sent comments to the California Actuarial Advisors Panel (CAAP) in October regarding its Discussion Draft, Version 9c, Model Actuarial Funding Policies and Practices (MAFPP) for Public Pension and OPEB Plans.
New ASOP 4 Exposure Draft
The Pension Committee plans to comment on the ASB’s new Exposure Draft on ASOP No. 4, Measuring Pension Obligations and Determining Pension Plan Costs or Contributions. Deadline for comments is May 31, 2013. Last year, the Pension Committee, the Pension Finance Task Force, and the Joint Committee on Retiree Health sent comments on the previous ASOP No. 4 Exposure Draft.
Longevity Rates and Social Security
In a Jan. 8 letter to the New York Times, the Academy responded to a Jan. 5 Op-Ed that questioned whether Social Security’s actuaries adequately account for health and demographic factors that affect longevity. The letter pointed out that Social Security actuaries constantly review, debate, and update longevity rates as well as other factors and use a panel of experts, including demographers, to review these assumptions. The Academy urged the president and Congress to focus on the larger issue—improving Social Security’s long-term solvency—and to act soon to prevent the need for more drastic changes in the future.
Converting to Roth Accounts
Tucked away on the last page of the “fiscal cliff” legislation, the American Taxpayer Relief Act of 2012, Section 902, is language that allows 401(k), 403(b), and 457 plan participants to convert pre-tax accounts to Roth accounts within the same plan. The new law lets participants make this conversion regardless of age and employment status. To learn more, log in to the members-only section of the Academy website and read the Academy’s alert.
The House Committee on Education and Workforce’s Subcommittee on Health, Employment, Labor, and Pensions, held a Dec. 19 hearing, “Challenges Facing Multiemployer Pension Plans: Evaluating PBGC's Insurance Program and Financial Outlook,” at which the sole witness was Josh Gotbaum, director of the Pension Benefit Guaranty Corp (PBGC). The hearing came shortly after the release of the PBGC’s 2012 annual report, which showed that the multiemployer program deficit increased from $2.8 billion to $5.2 billion. To learn more, log in to the members-only section of the Academy website and read the Academy’s alert.
Academy Input on Pension Costs
The Government Accountability Office’s (GAO) recent report on pension costs for department of defense contracts cites an interview with the Academy as part of the study. Senior Pension Fellow Don Fuerst met with the GAO in February to discuss cost accounting standards versus PPA minimum funding, how contractors deal with those differences, the resulting cash flow issues for some contractors, the long-term versus short-term implications, and the effects of forward pricing and competitive bidding of government contracts.
Meet Academy Pension Leaders
If you are attending the 2013 Enrolled Actuaries Meeting, April 7–10, in Washington, be sure to catch Session 304, “Dialogue with the Academy Pension Practice Council Leaders.” Panelists will be providing updates on recent projects and ongoing activities from the Academy’s Pension Practice Council and its committees. Speakers include Pension Practice Council Vice President John Moore, Senior Pension Fellow Don Fuerst, Multiemployer Pension Subcommittee Chairperson Eli Greenblum, Public Pension Subcommittee Chairperson Bill Hallmark, and Pension Committee Chairperson Mike Pollack.