Recent Activities
Retirement for the AGES
The Academy hosted Retirement for the AGES: Measuring for Success, a forum that brought together retirement community leaders for an in-depth discussion and thought-provoking assessment of retirement plans and current proposals based on the Academy’s Retirement for the AGES framework for retirement-income systems. The April 28 forum featured Mark Iwry, senior advisor to the secretary of the treasury and deputy assistant secretary for retirement and health policy at the U.S. Treasury Department, and Michael Kreps, senior pension and retirement counsel at the U.S. Senate Committee on Health, Education, Labor, and Pensions.
Pension De-risking
At the National Conference of Insurance Legislators’ (NCOIL) summer meeting in July, Ellen Kleinstuber, vice-chairperson of the Pension Committee, discussed NCOIL’s proposed Pension De-Risking Model Act following the letter sent by the Pension Committee to NCOIL on the proposal. The July 3 letter outlined specific concerns with the proposal, noting that, “the model act, if enacted by a state in its current form, could significantly impact, even freeze, the annuity market for pension plan sponsors seeking to ‘de-risk’ an ongoing plan or settle their pension obligations in conjunction with a pension plan termination.”
Essential Elements
On July 28, the Academy published a new Essential Elements paper, Securing Social Security, which highlights the long-term solvency challenges facing the nation’s largest social insurance program, and approaches that could provide it with adequate long-term financing. Essential Elements is a series designed to make actuarial analyses of public policy issues clearer to general audiences. In April, the Academy published an Essential Elements paper on The 80% Pension Funding Myth, which makes the case that, while many use this benchmark to determine whether pension plans are financially healthy, there is no single funding measurement that can distinguish healthy plans from unhealthy plans.
Social Security Monograph
The Social Security Committee released its updated monograph, Social Security Reform Options, on March 3, analyzing proposals to address Social Security’s financial challenges. The monograph describes the financial condition of Social Security, and outlines reform approaches based on the current program structure, alternative defined-benefit structures, and modifications that would incorporate individual accounts.
Comments on Mortality Experience Studies
The Pension Committee submitted comments to the Society of Actuaries’ Retirement Plans Experience Committee on the RP-2014 and MP-2014 exposure drafts on May 29. The Pension Committee raised concerns about the quality of the data used by the RPEC because it eliminated about 70 percent of the data, which may have led to biases in the results.
Intersector Notes
The Intersector Group released reports to the Pension Practice Council that contain notes from its March meetings with the Pension Benefit Guaranty Corporation and the Treasury Department and Internal Revenue Service.
Issue Briefs
The Social Security Committee released an issue brief on May 27 that analyzes potential Social Security design changes to create a defined contribution system within the Social Security program. Alternative approaches are explored along with the challenges that they pose.
The Social Security Committee updated its issue brief on May 2 on the quantitative measures policymakers can use while evaluating Social Security reform. This paper explores approaches to objectively measure proposals to modify the program.
The Public Plans Subcommittee published an issue brief on Feb. 19 that introduced objectives and principles for funding pension plans for state and local governments. The brief states that policies to establish funding for these plans should be formulated to maintain an appropriate balance among the competing objectives of benefit security, generational equity, and contribution stability.
Congressional Matters
The Pension Practice Council and Pension Finance Task Force submitted letters to congressional leaders on July 25 on proposals to raise revenues by changing private-sector pension law to offset unrelated spending increases. The Pension Practice Council and Pension Finance Task Force also sent letters to Congress in April on this issue.
The Pension Practice Council sent a letter to congressional leaders on March 31 regarding the sunset of certain multiemployer provisions in the Pension Protection Act of 2006 that will expire the end of 2014.
Senior Pension Fellow Donald Fuerst provided written testimony to the U.S. Senate Committee on Banking, Housing and Urban Affairs Subcommittee on Economic Policy’s hearing on the state of U.S. retirement security on March 12. With the reduction in defined-benefit retirement plans, workers face the risk of underestimating their likelihood of living into older ages and depleting their assets before the end of life, Fuerst wrote.
Regulatory Matters
The Pension Committee's Public Plans Subcommittee sent a letter to the Governmental Accounting Standards Board (GASB) on Aug. 29 commenting on an exposure draft on accounting and financial reporting for pension plans that are not administered through trusts and amendments to certain provisions of GASB Statements 67 and 68.
The Joint Committee on Retiree Health sent a letter on Aug. 29 to the GASB commenting on proposed statements of accounting and financial reporting by governmental employers for other postemployment benefits (OPEBs).
The Pension Committee sent a letter to the Internal Revenue Service (IRS) and Treasury Department on Aug. 26 regarding guidance needed in connection with the Highway and Transportation Funding Act of 2014.
The Pension Committee sent comments to the IRS on Feb. 28 regarding Notice 2014-5, Temporary Nondiscrimination Relief for Closed Defined Benefit Plans and Request for Comments.
Professionalism Matters
The Actuarial Standards Board (ASB) issued a request for comment on July 22 regarding actuarial standards of practice (ASOPs) related to public pension plan funding and accounting. Within the last year, the ASB has approved several revised pension standards, including ASOP No. 4, Measuring Pension Obligations and Determining Pension Plan Costs or Contributions (Dec. 2013); ASOP No. 6, Measuring Retiree Group Benefit Obligations (May 2014); and ASOP No. 27, Selection of Economic Assumptions for Measuring Pension Obligations (Sept. 2013). ASOP No. 34, Actuarial Practice Concerning Retirement Plan Benefits in Domestic Relations Actions, and No. 35, Selection of Demographic and Other Noneconomic Assumptions for Measuring Pension Obligations, are also being revised. Comments are due by Nov. 15.
The Joint Committee on Retiree Health submitted comments to the Actuarial Standards Board on revisions to ASOP No. 35, Selection of Demographic and Other Noneconomic Assumptions for Measuring Pension Obligations on Feb. 2. The committee raised issues about references to retiree group benefit practice, differences in demographic influences across practices, and concerns about coordination between pension and retiree group benefit standards.
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