| A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z | AA | |
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1 | Comment page: MOVED IN MARCH 2015 | 179 | |||||||||||||||||||||||||
2 | http://www.actuarialstandardsboard.org/11205-2/ | pages finished | 179 | ||||||||||||||||||||||||
3 | SORRY HAD TO REMOVE LINKS DUE TO ASB WEBSITE REDESIGN | letters finished | 55 | ||||||||||||||||||||||||
4 | Letter number | Submitted by | Date received | Link to letter | Page count (does not count pages of signatories, empty pages) | Letterhead/stated affiliation | Actuarial/other designations (from letter or actuarial directory) | Main points not explicitly addressing questions | Q1 | Q2 | Q3 | Q4 | Q5 | Q6 | Additional Notes | Summarized? | |||||||||||
5 | 1 | Kenneth A. Kent | 07.22.14 | 1 | none | FSA, FCA, MAAA | Non-pension actuaries should stay out of discussion; ASOPs should not differ between public and private pensions; trying to stay away from prescriptive ASOPs | TRUE | |||||||||||||||||||
6 | 2 | Alex Sussman | 07.24.14 | 1 | none | retired pension actuary | Underfunding not due to high return assumptions but due to politicians making contributions underfunding (even with those assumptions); should require pension sponsors to certify they understand downside risks of their own funding policies | TRUE | |||||||||||||||||||
7 | 3 | Kelly McKeethan | 07.25.14 | 1 | none | FCAS, MAAA, CERA | Additional guidance needed as public plans are not regulated; taxes could be raised to cover shortfalls | Guidance should take place within existing ASOPs | Appropriate for public plan ASOPs to be principles-based, not rules-based | Additional guidance not needed for non-public plans; higher standard of care needed for public plans due to public interest | If someone relies on findings, that is an intended user; may require additional work; should not apply to non-public plans | TRUE | |||||||||||||||
8 | 4 | Jan Harrington | 07.30.14 | 2 | none | EA, FIA, FSA, MAAA | No additional guidance needed; lack of regulation irrelevant to professional standards | N/A | N/A | No | No need for more formal guidance on public plans; if so, need to consider more formal guidance needed for non-public plans | No. such additional work is conceptually indistinguishable from the extra work that underlies ISAP.1. paragraph 2.8.2.b. | ISAP 1 is here: http://www.actuaries.org/CTTEES_ASC/Documents/ReformattedISAP1FINALOCTOBER_correctedJan2014.pdf paragraph 2.8.2.b = "2.8.2. If the actuary is unwilling to support the prescribed assumption or methodology because: ..... b. The actuary has been unable to judge the appropriateness of the prescribed assumption or methodology without performing a substantial amount of additional work beyond the scope of the assignment, or the actuary was not qualified to judge the appropriateness of the assumption, the actuary should disclose in the report that fact, the party who prescribed the assumption or methodology, and the reason why this party, rather than the actuary, set the assumption or methodology. " | TRUE | |||||||||||||
9 | 5 | Charles E. Chittenden | 08.14.14 | 4 | none | FSA, MAAA, EA | Yes, more guidance needed on how to establish a plan’s funding policy. | identify the issues actuaries should discuss with their principals re: funding policy in view of present/projected aspects of plan How to help principals prioritize between: funding adequacy, intergenerational equity, and stability of contributions Don't reflect "well-established" practice, need to encourage new approaches when needed | No. Should not have separate valuation standard for public plans, due to diversity of circumstances Standardization may be harmful | No; less prescriptive guidance on asset smoothing; better off with guidance on how actuaries can assist plan sponsors in deciding on their funding objectives and how these decisions influence the choices of actuarial methods | Maybe. There is a very limited need for ASOP guidance on funding pension plans in the private sector, as these are prescribed | No. ASOPs should not require additional work that no principal has requested. | TRUE | ||||||||||||||
10 | 6 | Thomas J. Cavanaugh & Brent A. Banister | 08.21.14 | 4 | Cavanaugh McDonald Consulting LLC http://cavmacconsulting.com/ | FSA, FCA, MAAA, EA (for both) PhD (for Banister) | Preliminary point: funding public plans is a public policy decision, not actuarial. Actuaries can advise and educate on consequences of policy choices, but not make the choices themselves | No need for specific public plan guidance If pension areas lack guidance from ASOPs, the issue goes beyond public plans | N/A | Any new guidance should be done through existing ASOPs, or ASOPs covering all pensions | ASOPs have long been principles-based, no need to depart from this | If additional needed, then needs to be applied to all pension types | Two significant issues for aiming at intended user beyond principals: 1. Multiple parties with diverging interests wanting many different pieces of info for own purposes 2. Actuary doing extra work not valued by principal - doing work for free If extra public disclosures needed, governments can change law to change requirements for reports | TRUE | |||||||||||||
11 | 7 | Mark D. J. Evans | 08.24.14 | 1 | Applied Stochastic, LLC | MAAA, FSA, FLMI/M | Promotes financial economics method of calculating actuarial present value -- all other are priced this way, pensions should be too. | TRUE | |||||||||||||||||||
12 | 8 | Jarmon Welch | 08.27.14 | 1 | none | ASA, EA, MAAA | Economic assumptions estimate ranges should be narrowed - not reasonable to have wildly varying economic assumption sets between different clients | TRUE | |||||||||||||||||||
13 | 9 | Tia Goss Sawhney | 09.07.14 | 6 | none | DrPH, FSA, MAAA | TRUE | ||||||||||||||||||||
14 | 10 | David T. Kausch | 09.12.14 | 4 | GRS, http://www.gabrielroeder.com/ | FSA, EA, FCA, MSPA, PhD | Actuarial profession is self-regulating: duty and privilege -- but cannot regulate our clients; make distiinction between regulating actuarial practice and regulating public pensions Recent updating of pension-related ASOPs: 27, 4, and 6 (finished) and 35 (ongoing) -- public pension issues known when exposed/reviewed...why revisit so soon? Some public plans are in trouble , but most are in reasonably good shape -- many in trouble were not contributing full ARC or ignored actuarial advice -- these are public policy issues, not actuarial | No. Narrowly focusing an ASOP on one segment of an actuarial practice area departs from ASB current practice | CAAP, AAA, SOA, and CCA noted already -- these are the appropriate orgs for additional guidance and education | Same answer as Q2 | The ASB should not change its practice of keeping the ASOPs principles based and should not be more prescriptive -- true for all ASOPs and all practice areas | As pertinent for private pensions as for public | Requiring the actuary to include significant work that is not requested by the Principal does not make sense for any practice area Legal implications -- breach of confidentiality Issue of other users of info -- may mislead/mine data for own uses | TRUE | |||||||||||||
15 | 11 | Timothy M. Ross | 09.18.14 | 2 | Ross Health Actuarial, http://www.rosshealthactuarial.com/ | FSA, MAAA | treatment in ASOPs unclear, but guidance from ABCD indicates: Public need not be considered principal for public service work Ross thinks this is incorrect interpretation May need more prescriptive guidance -- make public as principal more explicit, would not necessarily result in extra work | TRUE | |||||||||||||||||||
16 | 12 | Edwin C. Hustead | 09.25.14 | 1 | none | FSA, MAAA | Limit amortization periods to up to 30 years, either amending ASOP 4 or a special ASOP for public plans; in general need rational and reasonable limitation of funding for unfunded liability Standards needed for federal plans -- state/local are covered by GASB, federal are not Hustead is on the Board of a federal civilian pension plan, and see no guidance for federal plans for them | TRUE | |||||||||||||||||||
17 | 13 | Robert J. Rietz | 10.01.14 | 4 | none | FSA, FCA, MSPA, MAAA | Recommendation for both public & private practice to have specific mortality assumptions proscribed (lists 4 tables, all without mortality projection, most recent being UP-1984); makes numerical comparison of different mortality assumptions, including against recent tables with mortality projection to 2014 -- compares life expectancy from age 65 and annuity factors based on 6% discount rate Notes underfunding due to using the 4 tables specifically named, primarily affects public plans (private plans have prescribed mortality assumptions) Notes mortality assumption proscription would be new for ASOPs, but that this would not necessarily extend to other assumptions Proposes language for amending 35 | TRUE | |||||||||||||||||||
18 | 14 | Tia Goss Sawhney | 10.13.14 | 2 | none | DrPH, FSA, MAAA | Draws attention to the new proposed standard for Medicaid Managed-Care Capitation Rate Development and Certification and the discussion associated with the standard. Points out that with respect to health insurance rate development that the ASB and the actuarial community have acknowledged that need for a separate standard for Medicaid (public) pricing work, due differences in the regulatory environment and the obligation to serve public interests. | TRUE | |||||||||||||||||||
19 | 15 | JIM THOMPSON | 10.20.14 | 3 | none | life actuary, credentials not given | Remarks on life insurance company asset adequacy analysis (AAA), used because statutory reserving requirements may be inadequate in specific situation -- extends this concept to public pensions As with AAA, the proposed work would be confidential, reviewed by state insurance department | TRUE | |||||||||||||||||||
20 | 16 | Kevin Wolf | 10.23.14 | 1 | none | FSA, MAAA | Range of results should be involved in public pension work -- range with varying assumptions, specifically actual average return on assets plus/minus a certain amount -- prescribed by ASOP State law to be followed, but range of results should also be required to be reported, in addition to statutory requirements Requirement to respond to media reports | TRUE | |||||||||||||||||||
21 | 17 | Mary Pat Campbell | 10.29.14 | 3 | none | FSA, MAAA | Actuaries have little power over assumptions used to value public pensions Historical development of UAAL to provide info of source of growth of UAAL over time, including improper assumptions | TRUE | |||||||||||||||||||
22 | 18 | Errol Cramer | 10.30.14 | 5 | SOA, signing as president | FSA, MAAA | Public DB plans involve a unique intersection of stakeholders: employees/retirees, governmental sponsors, trustees, administrators, and general public 1. Public plans unique compared to other actuarial work, as no third-party, independent regulator/oversight 2. Misperception of ASOPs as regulation when actual regulator lacking 3. Significant differences in funding of public and private pensions Actuaries only advisors trained to understand the obligations in public pensions -- if they do not provide unbiased advice, who will? Public sponsors may choose to underfund plans, but should be made in the context of sound advice and explicit disclosures from their actuary. | Yes, due to three reasons in cell H22 If ASOPs not changed to provide additional guidance, require extra disclosures -- disclosures to counteract reason 2 in cell H22 -- need to indicate ASOPs are not actual regulation and no guidance given as to whether funding is adequate | Gives examples of additional guidance: - Guidance as to what constitutes an actuarially sound funding policy - More specific guidance that limits the practice of public sector plans to practices more akin to where private sector plans are today | Separate public plan standard is warranted public and private plans have different needs from ASOPs | ASOPs should not in general be prescriptive. Given that public sector plans are generally unregulated, specific guidance on assumptions and methods could be described without dictating funding practice | Additional information should be provided in disclosures for public sector plans; creating requirements via ASOPs would create level playing field for actuaries ASB may not want to do this, but in absence of additional info requirements, should require extra disclosures indicating that actual cost may deviate greatly than official valuation due to experience | TRUE | ||||||||||||||
23 | 19 | James T. Palermo | 11.03.14 | 2 | none | CFA (not an actuary) | The author, a local elected official in Illinois, believes that end users of actuarial valuations have insufficient understanding of the reports to make informed decisions based on the valuations. Users are often unaware of when the actuary departs from standard practice, in particular mortality assumptions and amortization methods and the implications of those departures. More narrative may be required to explain the reports for users -- 8 specific suggestions to help | TRUE | |||||||||||||||||||
24 | 20 | Mike Sydlaske | 11.05.14 | 4 | none | FSA, MAAA | All actuaries have reputation risk from public plan actuarial practice Comment re ASOP 41 – a requirement (disclosing that an assumption required by law or by client is believed by the actuary to be inappropriate) is not universally followed ASB, echoing an SOA point, should recognize that no other entity monitors actuarial valuations of public plans. Therefore, ASB should welcome valid member complaints of poor practice, and should announce which practices (for example, an investment rate above xx% or a mortality table older than AAAA) it will deem to trigger an automatic ASB referral | Should not have separate ASOPs, could be addressed by altering current ASOPs Specific ASOPs: 4, 6, 27, 35, 44, and 41 -- level of detail differs by ASOP, letter-writer likes level of detail in ASOP 6 Actuaries should avoid giving funding advice that impinges on political commentary or behavior science, but can give info as to consequences of different funding choices | Incremental change to existing ASOPs Gain/loss analysis should be part of annual report References disclosures recommended by SOA Blue Ribbon Panel | ASOPs stronger if universally applicable | see comments on Q1, specifically ASOPs 4 & 6 | See prior comments | a. Given public docs are often publicly available (online or via FOIA request), public should be considered intended user as defined in ASOP 41 b. Other actuarial communications related to selection of assumptions may need to be available to Intended Users c. That which is sent to Principal also available to Intended Users d. level of communications relevant to composition of Intended User group | TRUE | |||||||||||||
25 | 21 | James Hopson | 11.11.14 | 1 | none | FSA, MAAA | Cannot change ASOPs to affect the politics of public pensions Some info that could be shared is readily available, wouldn't take extra work (e.g. discount rate - is it net or gross?) | TRUE | |||||||||||||||||||
26 | 22 | Robert G. Bolton | 11.11.14 | 2 | Bolton Partners | FSA, EA, FCA | No. Funding is a legal/political, not actuarial, decision | No additional guidance needed | N/A | Changing rules would open actuaries to more legal risk. No reason public plans should be treated different from private/MEP plans. | Additional guidance not needed, and would be counterproductive | A lot already included in actuarial reports in public plans, much of which is publicly available. If interested parties want more info, they can hire their own actuaries | TRUE | ||||||||||||||
27 | 23 | Tom Herget | 11.12.14 | 1 | none | FSA, MAAA, CERA | Lack of standards/regulations in public pensions; ASOPs could help improve situation Require best estimate of liability value Funding should be 100% | TRUE | |||||||||||||||||||
28 | 24 | Donald E Fuerst | 11.12.14 | 4 | none | MAAA, FSA, EA, FCA | Yes, as current guidance does not require sufficient disclosure to the principal to enable the understanding of the degree of risk and uncertainty associated with funding the pension obligation | Should require discount rate based on risk-free rate to compare against funding - only MEPs come close in requirements, though PPA attempted to provide this info Disclosure of cash flows - would enable testing of sensitivity to discount rate These disclosures help understand risk and uncertainty in pension funding | Should apply to all pensions Could be added to ASOPs 4 and 41 | Should be principles-based, but using US Treasury rates for all pension types would provide comparability | Should apply to all pension plans | Should not be required to provide info to non-intended users should be required to provide sufficient info to Principal to understand risk and uncertainty in the pension obligation - extra work should not be burdensome | TRUE | ||||||||||||||
29 | 25 | Richard W. Ingram | 11.12.14 | 2 | Teachers Retirement System of Illinois | not an actuary, executive director of TRS | ASOPs shouldn't be more prescriptive; current ASOPs are sufficient to provide guidance GASB 67 & 68 are overly prescriptive, as valuation and funding are disconnected One Illinois fund in good condition due to statutory contribution requirement | ASOPs should not require extra work for outside interests | TRUE | ||||||||||||||||||
30 | 26 | John Robinson | 11.12.14 | 2 | none | FSA, FCA, MAAA | General observation of ASOPs: 1. A principles-based ASOP is intended to provide a framework within which the actuary approaches a given problem. It is not intended to achieve a particular outcome, such as “full funding”. 2. According to ASOP 1, an actuary may deviate from “the guidance of an ASOP”, subject to meeting certain disclosure requirements. This would apply whether the ASOP were principles-based or prescriptive. This aspect of ASOPs makes them unsuitable as a regulatory tool. 3. ASOPs do not address issues of governance | Further guidance not needed More useful: something with force of law to which public entities are answerable | Another ASOP not a feasible solution given that ASOPs do not have force of law/regulation | No. Allowed to deviate from ASOP Should not require extra work that not in interest of principal how can one determine what is useful info for non-intended user? | TRUE | ||||||||||||||||
31 | 27 | Kim Nicholl | 11.12.14 | 4 | Segal Consulting | FSA, FCA, EA, MAAA | ASOPs as applied to retiree health coverage should be different from ASOPs as applied to pension plans | Current ASOPs provide enough guidance ASB may need to detail practices that require extra disclosures | Negative/rolling amortization - should require extra disclosures/illustrations Fixed rate plans - implicit amortization should be disclosed normal cost methods where new entrants cover prior entrants' benefits - again disclosure on implicit amortization | Use framework of current ASOPs Should apply over all similar work | Should be principles-based, except disclosures may be prescribed | Principles/guidance should apply across all similar work, shouldn't be separate public plans | ASOPs cover quality of actuarial work, not usefulness Providing "useful" info to non-intended users is not feasible | TRUE | |||||||||||||
32 | 28 | Robert A. Wylie & Douglas J. Fiddler | 11.12.14 | 2 | South Dakota Retirement System | Wylie is not an actuary and executive director of SDRS Fiddler: ASA, MAAA, EA | No. Public plans already covered by multiple local laws, new GASB 67 and 68, and newly revised pension-related ASOPs Extra uniform requirements not necessarily helpful | Additional guidance not needed | Additional guidance not needed | Would be difficult to apply uniform requirements over different public plans that are under different legal/local situations | Additional guidance not needed | No - would put actuaries under possibly unlimited demands Extra info may be against interests of plan without adding value for the public | TRUE | ||||||||||||||
33 | 29 | Paul Angelo | 11.13.14 | 6 | CCA, writing on direction of the CCA Public Plans Community (not for CCA Board, etc) | FSA, FCA, MAAA, EA | There are other lightly-regulated plans (church plans, corporate non-qualified plans) that could do with similar guidance as public plans | Extra guidance in ASOPs would not help issue of lack of regulation of public plans 1. ASOPs could narrow range of what is considered acceptable practice 2. Targeted required disclosures by actuary could help actuary highlight sponsor choices that may be inappropriate | Additional guidance would be helpful in both calculation issues, i.e., methods and assumptions (ASOP sections 3) and disclosure requirements (ASOP sections 4) Specific calculation issues: 1. Rolling/negative amortization 2. Ultimate entry age cost method 3. Phasing in assumption/liability changes Gives some disclosure issues where guidance could be helpful, such as historical pattern of underfunding, issues surrounding calculation as above | Any additional guidance should be in current ASOP framework -- consistency & usability are key, try to reduce cross-references Should keep in mind applicability to other lightly-regulated plans (church plans, non-qualified plans) | Lack of uniformity in funding means it could help actuaries could point to practices outside range of reasonable actuarial practice Prescribed/proscribed practice should flow from principles in ASOPs -- example, proscription against negative amortization would flow from principle that unfunded liability must eventually decrease Favor development of principles over uniform rules | Any new or amended guidance should apply to all retirement practice Part of applying principles is taking external constraints into account (whether regulatory or otherwise) | No, actuary should not do additional, significant work for other stakeholders. Principal should decide what info is available to non-intended users. Possible conflicts of interest in doing work for other parties not the principal. Separately, yes, if requirement to share specific information with non-principals is considered by ASB, it should be extended to all pension plan types, not only public plans | TRUE | |||||||||||||
34 | 30 | Paul Zorn | 11.14.14 | 3 | GRS, http://www.gabrielroeder.com/ | not an actuary, director of governmental research | ASOPs Nos. 4, 6, 27, 35 and 44 provide the framework for actuarial practice with regard to pensions and OPEBs -- have been recently reviewed/revised/under revision -- applies to all pension types Other overseeing entities: GASB, IRS/Dept of Treasury, state/local oversight Efforts to federally regulate public plans would run into constitutional/federalism issues | No. Issues of payment for work, breaking state law re: confidentiality, extra legal risk for actuaries, etc. If extra requirements embedded in ASOPs, should extend to all pension practice | TRUE | ||||||||||||||||||
35 | 31 | Alberto Dominguez | 11.14.14 | 3 | none | FSA, PRM | ASOPs codify consensus practice which is inadequate; need to reflect more rigorous best practice. | Need additional guidance to bring public practice up to private practice. | -Require actuary to illustrate impact of failure to contribute ARC; -proscribe negative amortization and/or rolling amortization periods; -proscibe use of EROA as discount rate; -Strengthen guidance on acceptable mortality assumptions -Strengthen guidance on retirement age assumption | no opinion | ASOPs should remain principles based, but if principles aren't stronger outside forces will impose rules based prescriptions. | Suggestions under Q2 are broadly applicable | No additional work required if Q1 to Q5 addressed | TRUE | |||||||||||||
36 | 32 | Brian B. Murphy | 11.14.14 | 3 | GRS, http://www.gabrielroeder.com/ | FSA, EA, FCA, MAAA, PhD | ASOPs are irrelevant to the problem - underfunding due to lack of mone for govt Choices as actuaries: 1. Take no specific action, let plan sponsors deal 2. Create public plan-specific ASOPs...seems likely, but should really apply to all retirement areas of practice 3. Use Existing Tools and Standards to Encourage Sound Governance and Funding -- current actuarial bodies have already shown some leadership here 4. Encourage Fiscal Responsibility in Government -- underfunding often due to lack of funds, weak balance sheet, so make it up in the pensions | TRUE | |||||||||||||||||||
37 | 33 | Alan R. Glickstein &Michael F. Pollack | 11.14.14 | 2 | Towers Watson, towerswatson.com | Glickstein: ASA, EA Pollack: FSA, EA | -ASOPs should be principles-based, so actuary can apply principles to different situations - ASOPs set forth basic professional standards, not best practices - ASOPs should not impinge on arrangement between actuary and Principal - ASOPs shoud not be written so that it implies actuaries work for the "general public" Private plans already have a lot of oversight, do not want new public plan-related ASOP changes to affect private plans | TRUE | |||||||||||||||||||
38 | 34 | Maria Cheatham | 11.14.14 | 2 | Principal Financial Group | FSA, EA, MAAA | Recs from SOA Blue Ribbon Panel should be applied to all pension plan types - primary areas: 1. Funding principles 2. Enhanced disclosures of risk methods Additional risk metrics to be standard in deliverables: 1. Valuation of liability/normal cost with risk-free rate - Full fair value of employee benefit - Cost of plan assuming no asset risk taken on - Guidepost for investment performance 2. Multi-year stress-testing | TRUE | |||||||||||||||||||
39 | 35 | Richard A. Young | 11.14.14 | 4 | NY State Teachers Retirement System | ASA, EA, FCA, MAAA | Financial crisis/market downturn has led to increased pension costs and reduction in funded ratios Financial economics considerations already in ASOP 27 | No, the four ASOPs specific to actuarial valuations of pension plans provide sufficient guidance Public plans are regulated by a variety of laws, and non-uniformity of this regulation is a good thing | N/A | N/A | No. Public plans (and employees) differ greatly, and rules appropriate for one plan/class of employee would be inappropriate for others Legal problems if ASOPs and state/local laws contradict | Additional guidance not needed, but is ASB puts out additional, it should apply to all types of pension plans | No. If unintended user wants own info, they can hire own actuary to do extra work | TRUE | |||||||||||||
40 | 36 | Gene Kalwarski | 11.14.14 | 6 | Cheiron | FSA | Additional guidance needed for all pension plan types, not just public, should be under current ASOP structure and non-prescriptive | Yes, but should not be prescriptive | Projections on best estimate assumptions, stress-testing assumptions and scenarios | Should be incorporated into current ASOPs, or if new ASOP, something broadly applicable to all pension plan types | Should remain principles-based | Public plan actuaries should not be held to different standards than other pension area practice | Any standard requirements should apply for all pension plan types Actuary should not be required to do work beyond that which requested by principal | TRUE | |||||||||||||
41 | 37 | Robert C. North | 11.14.14 | 8 | none | FSA, EA, FCA, FSPA, MAAA | Actuaries have so far avoided much blame in underfunding of public pensions ASOPs are shield/sword only so far as they're strong No real regulation on public pension practice, no third party "policeman" Perhaps profession, via ASOPs and ASB, should stand in as "policeman" | Yes. Items to note: -Principals are really taxpayers, not public plan trustees (the assumed principals) -Often public plan sponsors would rather pay later for current benefits accrued; public pension unfunded liability a "soft debt" often shortchanged by politicians - Few professional obligations on public plan actuaries to highlight underfunding and its dangers, sometimes agree to methods that undercut intergenerational equity - Risk analysis not required | -To whom does the actuary owe responsibility? -What level of disclosure is appropriate? | Yes, separate public plan ASOP is necessary | Support concept of principles-based ASOPs, but public plan ASOP(s) may need more prescription, if it is to have desired impact | Priorities: would be good to have uniform ASOPs across all pension practices (such as MEPs), but priority is for public plans, which is why they should have their own ASOP | Actuarial profession may need to ask more of its clients and practitioners... stakeholders may not be getting enough info to make decisions | TRUE | |||||||||||||
42 | 38 | ALAN MILLIGAN | 11.14.14 | 7 | Calpers | FSA, FCA, FCIA, MAAA | Supports position of NASRA: no need for public plan-specific guidance -pension-related ASOPs can be improved, and should be broadly based and applied -ASOPs should be principles-based, distinguish between professional/unprofessional practice -- not prescriptive, like regulation | Yes, additional guidance needed (not mandatory standards) | Examples (where users of reports may be misled) - Risk disclosures - Info on prospective plan termination (100% funded does not mean fully-funded in case of plan termination) - Explicit discussion of funding (assumption of full contributions, when this is not the case) | As broadly as possible, in current ASOPs | Principles-based, but some principles can be prescriptively applied (as with ASOP 41) | Should apply to all pension practice | Info required should remain with trustees of plan Public info available via FOIA requests, gives underlying, and other interested parties can pay for additional work Taxpayers can also commission further studies | TRUE | |||||||||||||
43 | 39 | Rick Reed | 11.14.14 | 5 | Calstrs | MAAA, ASA, EA, FCA | Any new standards should be principles-based, and extend to all pension plan types | Yes. Some areas where actuarial advice is underdeveloped, but flexibility also important | Three areas: - Investment risk and non-investment risk discussion - Short-term and long-term projections - Improved communications of results | Incorporate into current ASOPs and apply to all pension practice Areas where pension plans could improve: 1. Risk disclosure 2. Transparency 3. Governance 4. Resiliency | Principles-based | Should apply to all pension practice | No, actuaries should do work only for principal as applicable for private plans (shareholders are stakeholders) as public | TRUE | |||||||||||||
44 | 40 | Kati Buccinna | 11.14.14 | 3 | none | ASA, EA, MAAA | No. additional guidance not needed for public plans. They are regulated via state/local law. GASB involved. If public plans need more regulation, needs to be done via legislative process, not ASOPs. | N/A | N/A | Should remain principles-based | No additional guidance needed | Outside scope of ASOPs to do additional, uncompensated work for non-principal interests -- situation is involved in private plans (shareholders have interest, but generally not principal in private plan valuation) | TRUE | ||||||||||||||
45 | 41 | Jeremy Gold | 11.14.14 | 3 | none | FSA, MAAA, CERA | In cover to answers, asks for public hearing on the issue according to ASB procedure | yes we need a separate standard because, despite common roots, public and corporate pension actuarial practice has diverged to an unbridgeable degree | challenges false dichotomy between principles-based and prescriptive, asserting standards can be both, and yes we need more prescription for public plans | TRUE | |||||||||||||||||
46 | 42 | NASRA, NCPERS, & NCTR | 11.14.14 | 3 | NASRA, NCPERS, NCTR | multiple executive directors of public pensions, CIOs, etc | 2 pages' worth of signatories, covering multiple public plans "In sum, we believe that current ASOPs, particularly when combined with the practices of public pension actuaries and their public pension clients, provide sufficient guidance, transparency, and clarity to actuarial valuations and related analyses, without imposing new requirements for calculation and reporting" | Though public plans are not uniformly regulated, they are heavily regulated via state/local law -- very transparent and open to the public As a result, public plans do not need additional actuarial guidance compared to other pension plans | N/A | N/A | Principles-based ASOPs more appropriate for public plans given their diversity/non-uniformity | Should not have separate standards for public plans | No justification for actuaries being required to do extra work - public plans have transparent reporting of data, trustees tend to be non-actuarial laypersons so reports are acceptable for general public | TRUE | |||||||||||||
47 | 43 | Hank Frantz | 11.14.14 | 2 | none | FSA, MAAA (retired) | Public plan sponsors/trustees probably got good actuarial info, "better" reports would not necessarily have changed underfunding SOA Blue Ribbon Panel has good recs: undiscounted cash flows, stress-testing Reasons to enhance actuarial reports, though would not change funding decisions: - self-preservation (of individual actuaries involved) - actuaries uniquely qualified to explain the consequences of underfunding to the ultimate (in many cases) funding entity – the tax payer May need supplement to standard public pension valuation reports, less technical and geared toward general public | TRUE | |||||||||||||||||||
48 | 44 | John M. Crider, Jr. | 11.14.14 | 1 | none | ASA, EA, MAAA | Agree with NASRA letter (#42?) Disclosures do not fund pensions -- enough disclosures in current ASOPs ASB & Academy could help by providing education to public/interested parties in reading actuarial reports -- AAA's Essential Elements series a good place for this | TRUE | |||||||||||||||||||
49 | 45 | Josh McGee | 11.15.14 | 4 | Laura and John Arnold Foundation | PhD | Standards should: Be more prescriptive; Include a discussion of risk and uncertainty, and; Have disclosures that are forward looking and useful to a broader audience. | Additional guidance is essential. Insufficient contributions a big part of the problem, more prescriptive standards could help actuaries improve prudence in funding advice | - More on measuring risk/uncertainty in the plans - More forward-looking, not just looking historically - Ranges around assumptions - Timely reports to inform sponsors/trustees and plan participants | Yes, separate standard for public plans: - public plan regulation/methods/etc differs greatly from private plans - Risks of public plans borne by more varied stakeholders than private plans | Should be more prescriptive in: - actuarial cost methods and amortization - regular review of assumptions - setting modeling assumptions where there is optionality (e.g. variable COLAs) - mortality projection scales Expand discussion for pension fund and risk: - “What is the probability that the annual contributions from the plan sponsor will be sufficient to fully fund benefit promises?” - “Should plan assumptions, and thus contributions, be more conservative to better ensure benefits are fully funded?” | Letter-writer's experience is with public plans, so not sure applicability to private plans To the extent that public and private plans operate under different conditions/constraints, may be appropriate to have different standards | Expand reports to include: (1) budget officers interested in understanding short-term contribution trends, (2) taxpayers and other stakeholders who wish to understand the pension plan’s long-term cost under alternative economic, demographic, and financial conditions, (3) members questioning the security of their retirement benefits, and (4) groups inquiring about the risk surrounding plan assumptions | TRUE | |||||||||||||
50 | 46 | W. James Koss, Cathy Nagy, &Alan E. Sonnanstine | 11.14.14 | 1 | none | Koss: MAAA, ASA, EA, FCA Nagy: MAAA, FSA, EA Sonnanstine: MAAA, ASA, FCA | actuarial practice within purview of ASB, not governance More guidance in terms of risk disclosures, for both public and private pensions No to extra work, as taxpayers would not be interested in paying for endless queries | TRUE | |||||||||||||||||||
51 | 47 | California Actuarial Advisory Panel (CAAP) | 11.07.14 | 6 | CAAP | N/A | Additional guidance not strictly needed, but could be helpful | Principle missing from ASOPs: contribution policy and intergenerational equity Additional principles-based disclosures: - potential contribution volatility - potential funding level volatility - plan maturity - benefit security New ASOP on risk disclosures in development | Use existing ASOP structure: - Contribution allocation in ASOP 4 and/or 44 - Actuarial assumptions in ASOPs 27 and/or 35 | Principles-based, but can be developed so that they would be more prescriptive | New guidance should apply across all pension practice -- items in Q2 are lacking in other pension practice, not just public plans | No, should provide work only for principal Actuary should be able to define intended user Any new guidance should not be restricted to public plans Public plans generally have info publicly available | Many members of the CAAP have response letters elsewhere here: Paul Angelo, Alan Milligan, Rick Reed | TRUE | |||||||||||||
52 | 48 | Matthew M. Smith | 11.14.14 | 3 | Office of the Chief Actuary, Washington State -- but disclaimer it's his own opinions | FCA, EA, MAAA | Yes, need further guidance on communicating risk to non-actuarial clients | Communicating risk and uncertainty in actuarial valuations | Incorporate into current ASOPs Issue of communicating risk not unique to public pension actuaries | No. Would turn ASOPs into regulatory structure, and could have unintended consequences If issue is inappropriate practices of the few, could have ABCD take a role for counseling and discipline for those few | same as Q3 | No. Not appropriate in setting of ASOPs, which is for actuaries providing work to principal Where public interest in involved, Code of Conduct more appropriate, not ASOPs | TRUE | ||||||||||||||
53 | 49 | Stephen A. Alpert | 11.14.14 | 3 | American Academy of Actuaries, Public Interest Committee | MAAA, FSA, FCA, MSPA, EA | Stakeholders for public plans differs from private plans (taxpayers involved, not just principals and covered employees/retirees) -- additional guidance needed for public plans v. private -- taking too narrow a view of serving only principal damages reputation of profession two broad classes of actuarial info - 1 very technical (rules, regulations, prescribed treated) and 2 actuarial judgment/opinion/analysis actuarial standards better organized by what actuary does not for whom it is done | TRUE | |||||||||||||||||||
54 | 50 | Daniel P. Moore | 11.15.14 | 9 | none | FSA, EA, MAAA, MSPA, FCA | Focus on: discount rate used to calculate normal cost and actuarial accrued liability -- traditional expected return approach permitted by ASOP 27 inappropriately reflects an investment return discount for periods for which there is no investment; current financial economics approach lacks theoretical and empirical support. Proposes ‘expected cost’ approach (to replace the expected return approach): the discount rate blends investment return for periods of investment, and a plan sponsor borrowing rate for periods until future contributions. 'Expected cost' approach addresse serious practical issue of tendency in public plans to increase benefits when plan’s finances improve, and tendency of public plan sponsors to underfund. | TRUE | |||||||||||||||||||
55 | 51 | William R. Hallmark | 11.15.14 | 6 | American Academy of Actuaries, Public Plans Subcommittee | MAAA, ASA, EA, FCA | One common aspect of ill-funded public plans: full ARC not contributed (due to statutory requirement setting lower level, or because other budgetary priorities) Limits to role actuaries/ASB can play: statutory leeway differs, actuaries can provide education and information for consequences of decisions | Yes, and would be helpful for all pension practice, not just public Could have additional disclosures when plan contribution not in line with actuarial recommendaions Additional guidance could constrain outlying practice | Make contribution allocation procedures more robust -- refers to Academy Feb 2014 Issue Brief balance: benefit security, contribution stability and predictability, and generational equity. enhance transparency, anticipate risk Enhance guidance surrounding those items, consider effect of assumptions (including future contribution patterns) not being fulfilled Should have constraints: - amortization should not be such that UAL does not decrease (ultimately) - NC should reflect individual costs (under individual approach) - ARC should be calculated, even if principal doesn't want it - Disclosure of historical ARC vs. actual contributions Spread gain vs. immediate gain | Incorporate into current ASOPs | Remain principles-based. However, some disclosures are more prescriptive, and could be expanded upon in targeted manner | Guidance should apply to all pension actuaries engaged in a specific activity Public plan actuaries may be involved more often in specified activities, and ASOPs would be more often applied to them, but that's a different issue | Usually processes for unintended users to get access to info for public plans -- people should go through those processes However, ASB could determine that principals/intended users need to have specific info and/or disclosures, such as ARC, even though they do not request it | TRUE | |||||||||||||
56 | 52 | Jeffrey P. Petertil | 11.15.14 | 2 | American Academy of Actuaries, Joint Committee on Retiree Health | ASA, FCA, MAAA | OPEBs mentioned only once in ASB request for comment, but assume that OPEBs would be considered as well, not just public pension plans References recent revisions to ASOP 6 -- pooling of health financial risks Mentions Q6, more specifically needing to have it made clear the stake of the actuarial profession in these issues | TRUE | |||||||||||||||||||
57 | 53 | Robert Stein, Andrew Biggs, Douglas Elliott, Bradley Belt, David Crane, Malcolm Hamilton, Laurence Msall, Richard Ravitch, & Larry Zimpleman | 11.12.14 | 6 | SOA, Blue Ribbon Panel on Public Pensions | mix of actuaries and non-actuaries, all members of SOA BRP | Yes, in several key areas Governance structures of public plans have agency issues actuarial profession must provide more specific guidance to assure that funding calculations more fully support funding objectives, mainly that accumulating funds will be adequate to meet obligations as they come due Example evidence: info on assumed investment return/implied real return -- shouldn't vary by 350 bps, and relatively high spread over inflation 44% of public plans in database have amortization period >= 30 years | - clear statement of principles providing a defined targeted outcome for funding calculations - key priorities are i) adequacy of funding and ii) maintenance of intergenerational equity - Recognition of uncertainty in plan, volatility in funding - Risk analysis other than only best estimate - Assumptions should be demonstrably achievable 50% of the time (expected return often higher than historical median) - Funding calculations recognizing volatility in returns Other areas: - Cost methods - Asset smoothing - Demographic assumptions - Amortization periods | Current ASOPs do not articulate any principles re: public pensions Request principles be established Boundaries need to be set in terms of acceptable practice | Public plans: work is in public realm Attempting to exclude any party that uses this publically available information from the legitimate user category will ultimately fail BRP Report recommend that additional disclosures be provided in the actuarial report to highlight information about plan finances and contribution recommendations that can be understood by all stakeholders. To that end, we recommend that actuarial reports include the calculation and disclosure of i) the plan liability and normal cost at the risk free rate, and ii) the standardized benchmark contribution, both as defined in our report on funding. | TRUE | ||||||||||||||||
58 | 54 | Larry Pollack | 11.15.14 | 3 | none | FSA, EA, MAAA | Yes | Stricter standards needed for public plans: - disconnect between practice and economic principles - practices currently in conformation with ASOPs under external critiques - High-profile underfunded plans call into question actuarial practice - Differences in public and private practice may mislead as to financial health of plan.....identical plans (other than sponsor) would show different trend in "health" - Incentives in investment-related discount rate - Unique benefit features in public plans (DROPs, 13th checks) - Lack of prescription in public plans leads to actuaries getting involved in non-actuarial issues (amortization schedules) - External parties pointing to ASOPs as rigor means ASB should make sure standards are sufficiently high | Separate standard | Prescriptive enough to ensure practice in accordance with sound principles | MEPs have a lot of the same issues -- same standards should apply Some public plan practice improvement would also benefit corporate plans Priority: public practice reform is urgent | Real economic principals for public plans are taxpayers, ASOPs should align Additional work may be needed to the extend that doing a valuation in the first place is significant work Disclosure requirements already exist extensively for corporate plans, MEPs could use extra disclosures, just like public plans | TRUE | ||||||||||||||
59 | 55 | Gordon J. Latter | 11.15.14 | 5 | American Academy of Actuaries, Pension Finance Task Force | FSA, MAAA | Yes, additional guidance needed Obvious differences between public & private pensions: - nature of stakeholders - Governance - Funding policies - Intergenerational equity - Current actuarial practice Given differences, public-specific guidance needed | Two examples: -An actuary’s responsibility to various public plan stakeholders, including the taxpayers who ultimately finance the plan -An actuary’s responsibility to provide information to various public plan stakeholders beyond what is required by law or governmental accounting standards | Separate guidance for public plans preferred over using current ASOPs Example: ASOPs 33 & 37 reference mutual insurers specifically, ASOP 18 specifically pertains to LTCI | Committee considering should consider options -- don't pre-ordain approach to take | New guidance specific to public plans, not necessarily applicable to other plans...but if beneficial standards, could be added to extant ASOPs | Intended users - larger group than principals Taxpayers are economic principals, though not considered principals under Code of Conduct -- should be considered intended users Additional info may not require significant additional work, given it could be based on info already used/calculated | TRUE | ||||||||||||||
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