Headlines about "Actuarial - funding of pensions"

Gathered from the web by the editors at BenefitsLink.com.
Pension Funding and Individual Accounts in Economies with Life-Cyclers and Myopes
Excerpt: "The present paper studies the growth and efficiency consequences of pension funding with individual retirement accounts in a general equilibrium overlapping generations model with idiosyncratic lifespan and labor income uncertainty. We distinguish between economies with rational and hyperbolic consumers and compare the consequences of voluntary and mandatory retirement plans. Three major findings are derived in our study: First, we quantify the commitment effect of social security for myopic individuals by roughly 1 percent of aggregate resources. It is possible to recapture this commitment technology in IRAs, if those are annuitized. Second, despite the fact that our consumers have an operative bequest motive, the welfare gain from the (implicit) longevity insurance of the pension system is significant and amounts to roughly 0.5 percent of aggregate resources. However, mandatory annuitization reduces unintended bequests so that future generations are significantly hurt. Finally, our results highlight the importance of liquidity effects for social security analysis. These efficiency gains are only attainable if accounts are voluntary and not mandatory." (Social Science Research Network)

Private Pensions: Sponsors of 10 Underfunded Plans Paid Executives Approximately $350 Million in Compensation Shortly Before Plan Termination
Excerpt: "To identify case study examples GAO analyzed a listing of the 1,246 underfunded plans that were terminated from 1999 to 2008 and selected public companies with large unfunded liabilities, large unfunded liabilities per participant, and a large number of plan participants. GAO reviewed documents provided by companies and executives, and interviewed PBGC and company officials. GAO also reviewed Securities and Exchange Commission (SEC) filings and PBGC documents disclosing plan underfunding at the time of termination and missed contributions. Executive compensation figures may be understated because some company executives could not be located, did not respond to document requests, declined interviews, and did not give GAO access to their tax records." (U.S. Government Accountability Office)

Federally Funded Defined Benefit Plan: Options for the Future
Excerpt: "Milliman's client had a crisis with its pension plan. This nonprofit organization was unusual, in that its defined benefit pension plan was funded by the federal Medicare program. The plan provided a modest formula of 1% of final earnings, multiplied by credited service. Funding was fixed several years ago at a very low percentage of total compensation. The amount was sufficient to cover the cost for the annual accrual; until recently, the assets and liabilities were approximately equal. Then the recession hit, and in 2008 the plan lost around 28% of its assets. Taking into account the new requirements under the Pension Protection Act of 2006 (PPA), Milliman came up with a preliminary ten-year funding projection: the plan sponsor was required to make up the asset losses over a seven-year period." (Milliman)

As Pensions Were Abandoned, Four Firms Paid Top Executives $49.5M in Benefits
Excerpt: "Top executives at four companies that jettisoned their employee pension plans received $49.5 million in retirement and severance benefits in the years before the companies filed for bankruptcy, while retirees saw their benefits cut by as much as two thirds, congressional investigators conclude in a report to be released today. The Government Accountability Office (GAO) reports that pensions at the companies, United Airlines, US Airways, Polaroid and Reliance Insurance, were underfunded by more than $11 billion when the companies turned them over to a government-backed insurance fund. The report says executives at those four companies and six others that abandoned their pension plans took in a total of $350 million in pay and perks in the years leading up to the bankruptcies." (USA TODAY)

Governance and Compliance Advisory Update: November 2009
Excerpt: "October saw significant activity with respect to retirement, executive compensation, welfare and other benefit legislation, regulations and rulings." (Towers Perrin)

[Guidance Overview] 2008 Form 5500 Information on Defined Benefit Pension Plans Must Be Posted on Company Intranet
Excerpt: "Employers with defined benefit pension plans that have recently filed a 2008 Form 5500 should address the [disclosure] issues immediately to determine if the posting obligation applies to them, and if so, how to best comply with this new disclosure obligation. At a minimum, employers with an intranet site must make the required information available on the site as soon as possible in order to be in compliance." (Pillsbury Winthrop Shaw Pittman LLP)

[Guidance Overview] Where Private Plan Is Substantially Over-Funded, Participants Suffered No Injury from Alleged ERISA Violations
Excerpt: "The parties agreed that at the time McCullough filed his complaint, and at all times relevant thereafter, the plan was substantially overfunded. The parties also stipulated that the plan had never failed to pay benefits owed to participants or beneficiaries, and that AEGON had no intention to terminate the plan. The court of appeals held that its own binding circuit precedent did not permit a participant in a defined benefit plan to bring suit claiming liability under ERISA for alleged breaches of fiduciary duties when the plan was overfunded. McCullough v. AEGON USA, Inc., Case No. 08-1952 (U.S. 8th Cir., November 3, 2009)." (Cypen & Cypen)

[Guidance Overview] Final PPA Funding Rules
Excerpt: "For those who have been following the evolution of PPA funding rules, most of the [target date article] is review. Probably the biggest outstanding issue at this point is whether and how Congress will temporarily change these rules to provide additional breathing room for plan sponsors struggling in the wake of the 2008 financial crisis." (J.P. Morgan Compensation and Benefit Strategies)

Escalating Pension Benefit Costs: Another Threat to Nonprofit Survival? (PDF)
Excerpt: "[A]re spiraling pension costs putting nonprofits across the country at risk of shutting down? How prevalent are pension and other retirement benefits at nonprofit organizations? What types of pressuresare nonprofit executives experiencing relating to retirement benefit programs, and how are they responding? Given the dearth of data on nonprofit retirement programs, the Johns Hopkins Nonprofit Listening Post Project undertook a Sounding, or survey, of its nationwide sample of nonprofit human service, community development, and cultural organizationson this important topic. The Sounding specifically focused on the two most common types of retirement benefit plans: defined benefit plans, i.e., plans in which employers maintain control over the investment of assetsand that provide a set level of benefits to employees at retirement; and defined contribution plans such as 401(k) or 403(b) plans in which the employer contributes to the cost but the employees maintain control over the investments, and benefit levels are not guaranteed." (Johns Hopkins University)

Practice Note on Current and Emerging Practices in Selection and Documentation of Mortality Assumptions for Pensions (PDF)
Excerpt: "Measurements of defined benefit pension plan obligations include calculations that assign plan costs to time periods, actuarial present value calculations, and estimates of the magnitude of future plan obligations. This practice note does not apply to individual benefit calculations or individual benefit statement estimates. The application of the information contained herein is intended to cover qualified and non-qualified plans, and governmental and non-governmental plans where the actuary is subject to ASOP No 35. This note may be used when setting assumptions, or providing advice on setting assumptions, for funding (where permitted by law) and for financial accounting." (American Academy of Actuaries)

Practice Note on Selecting and Documenting Other Pension Assumptions (PDF)
Excerpt: "This practice note was prepared by the Pension Committee ('Committee') of the American Academy of Actuaries. It provides information to actuaries on current and emerging practices in the selection and documentation of certain actuarial assumptions for measuring obligations of defined benefit pension plans. . . . Measurements of defined benefit pension plan obligations include calculations that assign plan costs to time periods, actuarial present value calculations, and estimates of the magnitude of future plan obligations. . . . The application of the information contained herein is intended to cover qualified and non-qualified plans, and governmental and nongovernmental plans. This practice note may be used when setting or providing advice on funding, where permitted by law, and financial accounting assumptions." (American Academy of Actuaries)

Updated Summary of Leading Single Employer Funding Relief Proposals (PDF)
35 pages. Excerpt: "On June 24, 2009, the House Education and Labor Committee approved H.R. 2989 (as amended), the 401(k) Fair Disclosure and Pension Security Act of 2009, which was introduced by Representative George Miller (D-CA), Chairman of the Committee. The bill included provisions affecting defined benefit plan funding. On October 27, 2009, Representatives Earl Pomeroy (D-ND) and Pat Tiberi (R-OH), Members of the Ways and Means Committee, introduced a funding relief bill, the Preserve Benefits and Jobs Act of 2009 (H.R. 3936). This bill follows in most respects a discussion draft released by Representative Pomeroy on August 27, 2009. On April 22, 2009, House Minority Leader John Boehner (R-OH) introduced H.R. 2021, which included funding proposals. This chart summarizes the single-employer funding proposals in the bills. The new aspects of the Pomeroy/Tiberi bill, as compared to the Pomeroy discussion draft, are in bold." (American Benefits Council)

Colorado Public Employees' Retirement Association Officials Disclose Plan to Fix Pension Fund
Excerpt: "Employees, employers and retirees of the Colorado Public Employees' Retirement Association will be required to make financial concessions as part of a plan being recommended to the lawmakers as a way to help fix the ailing pension program. . . . The recommendation, approved by the PERA board in October, will require a gradual increase in employee and employer contributions over a four-year period. It also will put a cap on the cost-of-living adjustment for all retirees, members and inactive members. The plan, being dubbed '2/2/2 Plus' will be presented to the Legislature for its consideration during the upcoming session." (The Pueblo Chieftain)

[Guidance Overview] Funding Regulations Provide Plan Sponsors with Numerous Elections
Excerpt: "The Final Treasury Regulations on determining the value of assets and liabilities for funding purposes, and on applying the benefit restrictions to underfunded plans, provide plan sponsors with numerous elections that merit identification. 74 Federal Register 53004 (October 15, 2009). The Final Treasury Regulations under Internal Revenue Code ?? 430 and 436 lay out the regime by which single employer defined benefit plans are required to value plan assets and benefit liabilities for funding purposes and also for the application of benefit restrictions for underfunded plans. The regulations identify or otherwise provide the plan sponsor with numerous elections that can be made in this regard. [The document provides a chart on 'Plan Sponsor Elections under Final Funding Regulations.']" (Deloitte via BenefitsLink.com)

Largest Iowa Public Workers' Union to Vote on Unpaid Days
Excerpt: "Iowa's largest public employee union will vote this month on whether to take five unpaid days off and sacrifice about $75 a month in retirement contributions in exchange for an agreement that none of its members will be laid off for seven months. A 'yes' vote by the American Federation of State County and Municipal Employees would save $26.4 million and 479 jobs, some held by workers who are not dues-paying AFSCME members. Those jobs are spread across many state departments, including human services, revenue, public safety and corrections." (The Des Moines Register)

Pension Finance Update, November 2009
Excerpt: "In our monthly pension finance update, we review changes in market-driven assets and liabilities during the month of October. While both asset levels and discount rates generally fell during the month, funded ratios for many plans will be very similar to those that they experienced at December 31, 2008." (JPMorgan)

[Official Guidance] Funding Yield Curve Segment Rates Updated for November 2009
Excerpt: "The 24-month segment rates are used for minimum funding requirements if a plan's first plan year begins after 2007, or if an election is made not to use the transitional rule of ?430(h)(2)(G) of the Code. The following rates are the 24-month segment rates for use with respect to the applicable month and year listed." (Internal Revenue Service)

State and Local Pension Gap May Be $1 Trillion
Excerpt: "U.S. state and local government pensions are underfunded by $1 trillion and may need to seek federal guarantees for their debt, according to Orin Kramer, chairman of New Jersey's Investment Council." (Bloomberg)

[Guidance Overview] Defined Benefit Plan Funding Relief Bill Introduced; Implications for Plan Sponsors
Excerpt: "Congressmen Pomeroy (D-ND) and Tiberi (R-OH) have introduced the Preserve Benefit and Jobs Act of 2009, a bill implementing many of the defined benefit plan funding relief proposals being advocated by sponsor and participant groups. In this article we review the bill and its implications for plan sponsors." (J.P. Morgan)

Springfield Missouri Voters Approve Tax to Top Up Underfunded Firefighter Pensions
Excerpt: "The city's proposed 3/4-cent sales tax to bolster the underfunded Police and Fire Pension Fund passed with 54.6 percent of the vote." (Springfield Business Journal)

Christie Victory Could Mean Reform for New Jersey Pensions
Excerpt: "The pending arrival of the first Republican governor in New Jersey since 1997 also has renewed hope among some Democratic lawmakers that they can overhaul the state's pension system for public employees, which is underfunded by more than $34 billion." (Bloomberg)

[Official Guidance] Court Says Participant in Overfunded Defined Benefit Plan Has No Standing to Sue for Fiduciary Duty Breaches
Excerpt: "[The 8th Circuit majority] held that plan participants 'would if anything be adversely affected by subjecting the Plan and its fiduciaries to costly litigation.'" (PLANSPONSOR)

[Guidance Overview] Pension Plan Amendments Required to Reflect Section 436 Contingent Limitations on Benefits
Excerpt: "Time is running out for sponsors of defined benefit pension plans to adopt amendments that must be made by the end of the year to provide for limits on benefit payments and benefit accruals as required under section 436 of the Internal Revenue Code. These limits apply in the event that the plan falls short of funding targets established under the Pension Protection Act of 2006 (PPA). Limits start to apply if the plan's adjusted funding target attainment percentage (AFTAP), as certified by the plan's actuary, falls below 80 percent, and additional and stricter limits apply if the plan's AFTAP falls below 60 percent." (Faegre & Benson)

Will Rising Required Benefit Plan Contributions Encourage Collapse of the Municipal Bond Market?
Excerpt: "[In a report entitled 'Dark Vision: The Coming Collapse of the Municipal Bond Market', Frederick J. Sheehan] notes that 'spending is rising and revenue is collapsing' for all levels of government. Pension fund losses will require governments to double their contributions to pension plans . . . ." (Phillip Greenspun)

[Opinion] Jobs in Peril: Assessing the Impact of Increases in Defined Benefit Plan Funding Obligations on Employment During an Economic Recession (PDF)
25 pages. Excerpt: "[C]ash-strapped companies are faced with the challenge of diverting to their defined benefit plans substantial amounts of money that could be used by these companies for productive capital investment. The employers who have made a long-term commitment to provide a defined benefit plan for their employees now face increases in their defined benefit funding obligations that threaten both the existence of these employers and the jobs of their employees. These extraordinary pension funding requirements potentially threaten the continued viability of those employers who sponsor defined benefit plans and could derail the economic recovery by forcing these employers to either severely curtail their capital investments or make further reductions in their workforces." (American Benefits Council)

Stock Gains Don't Rescue Pension Funding
Excerpt: "The stock market's 15% leap in the third quarter helped out companies on two fronts: their share prices rose, and they got a good return on their own equity investments. But one thing the bull run did not do was trigger a rise in the funded status of defined-benefit pension plans. Counter intuitively, the average funding level for plan sponsors among the S&P 1,500 companies actually fell one percentage point in the quarter, to 81% of what would be needed to pay for expected future pension obligations . . . ." (CFO.com)

Key Characteristics of Public Employee Pension Funds, Revised October 2009 (PDF)
22 pages. Excerpt: "The Public Fund Survey is an online compendium of key characteristics of the nation's largest public retirement systems and is sponsored by the National Association of State Retirement Administrators and the National Council on Teacher Retirement for the purpose of increasing knowledge and understanding of the public pension community. . . . This year's Summary is the first following the sharp drop in global investment markets that occurred in 2008. . . . The fall in asset values has caused aggregate funding levels to move downward from 86.7 percent in FY 07 to 85.3 percent in FY 08." (National Association of State Retirement Administrators)

Report Links Pension Funding Obligations to Layoffs
Excerpt: "Companies and business groups are telling lawmakers that the stepped-up pension funding is coming at the worst possible time -- in the middle of a severe economic downturn." (Workforce Management)

[Guidance Overview] Bill to Ease Multiemployer Pension Funding Is Introduced in Congress (PDF)
2 pages. Summarizes the multiemployer features of newly proposed pension funding relief legislation: the Preserve Benefits and Jobs Act of 2009 (PB&J Act), which was introduced by Congressmen Pomeroy and Tiberi. (Segal Company)

U.S. Census Bureau Report: Finances of Selected State and Local Government Employee Retirement Systems
Excerpt: "Finances of Selected Public Employee Retirement Systems is a quarterly survey that provides national summary data on the revenues, expenditures, and composition of assets of the largest public employee retirement systems. This survey currently consists of a panel of 100 retirement systems, which comprise 89.4 percent of financial activity among such entities. After a census has been taken, it is considered best practice to reselect the largest 100 retirement systems." (U.S. Census Bureau)

Ways and Means Committee Holds Hearing on DB Plan Funding and Investment Advice
Excerpt: "On Oct. 1, 2009, two panels testified before the House Committee on Ways and Means on retirement-related matters. The first focused on, and lobbied for, defined benefit (DB) pension funding relief. The six panelists, including Watson Wyatts director of Retirement Research, Mark Warshawsky, Ph.D., provided a wide range of experience and expertise. While it was universally accepted that pension relief is necessary, panelists disagreed about its form and who should receive it. Some advocated temporary relief from certain provisions of the Pension Protection Act of 2006 (PPA), while others argued for permanent changes to the law. The second panel focused on investment advice provided to defined contribution (DC) participants, specifically who can give investment advice to employees and how it should be provided." (Watson Wyatt Worldwide)

DB Plan Funding Update: Extending the Analysis Period Shows the Need for Smoother Funding Relief
Excerpt: "In a series of studies since the global financial crisis began, Watson Wyatt has projected the regulatory funded status and minimum required contributions for single-employer defined benefit (DB) plans, in the aggregate.1It has serially updated the analysis to reflect changing market conditions, new regulations and enacted or proposed temporary legislative relief. The studies have contributed to fruitful discussions with sponsors, regulators and legislative staff in the pension community; indeed, the article published in the October 2009 Insider underlay Mark Warshawsky's Oct. 1 testimony to the House Ways and Means Committee. This new study continues that effort by incorporating market conditions to Oct. 15, 2009, adding two proposed legislative relief provisions and extending the funding horizon out to 2013." (Watson Wyatt Worldwide)

[Opinion] Bill to Ease Multiemployer Pension Funding Is Introduced in Congress (PDF)
2 pages. Excerpt: "Funding relief legislation for multiemployer pension plans was introduced in the U.S. House of Representatives on October 27. H.R. 3936, the Preserve Benefits and Jobs Act (PB&J Act), sponsored by Representatives Earl Pomeroy (D-ND) and Patrick Tiberi (R-OH), includes extensive relief for single employer plans as well. This is a notable starting point, but Congress is still a long way from passing legislation to make it easier for trustees, employers and unions to deal with the impact of the 2008 market losses on pension plan funding." (The Segal Group, Inc.)

Bill Would Extend Time to Fund Pension Plans
Excerpt: "A bill introduced on Tuesday in the House would give struggling employers the option of spreading out required contributions to retirement plans over nine years, rather than the seven years they are now allowed. Under the proposal, companies would make only token payments for the first two years. To discourage companies from joining the many businesses that have frozen pension benefits for workers, Congress would also give employers up to 15 years to fully fund their plans if they agreed not to freeze benefits." (The New York Times; free registration required)

[Guidance Overview] Notice of Funding-Based Restriction on Lump-Sums Not Required for Participants in Pay Status
Excerpt: "CCH Note: The Treasury Department was authorized by the Worker, Retiree, and Employer Recovery Act of 2008 (P.L. 110-458) to prescribe rules (in consultation with the Labor Department) governing the ERISA-required notice of funding based limitations on distributions. The instant guidance has been issued pursuant to this authority. In addition, the IRS has further indicated that it will set forth (and presumably expound upon) the relief in upcoming guidance." (Wolters Kluwer)

Pension Funding Relief, PBGC Improvements Called for in HELP Committee Hearing
Excerpt: "In testimony Thursday before the U.S. Senate Committee on Health, Education, Labor and Pensions (HELP), witnesses urged legislators to loosen up funding rules for defined benefit pension plans. Richard Jones, Chief Retirement Actuary at Hewitt Associates, said the perils that DB plans are facing today are not only due to the struggling economy, but are exacerbated by regulatory changes that limit the flexibility in how and when companies fund their plans. 'The imminent need is for temporary relief to help employers solve the funding problems exacerbated by the recession,' he said." (PLANSPONSOR.com; free registration required)

[Guidance Overview] IRS's Final Regulations on Defined Benefit Plan Funding and Benefit Restrictions (PDF)
9 pages. Excerpt: "Guidance is still needed on related important areas not addressed in the final regulations. The IRS indicates that future regulations will be issued covering many of these areas, such as participant notices about benefit restrictions, quarterly contributions, mergers/spinoffs, and expenses to be included in target normal cost." (Buck Consultants)

Pension Funding Relief Bill Makes Congressional Debut
Excerpt: "Rep. Earl Pomeroy, D-North Dakota, introduced a bill Tuesday, October 27, that would give businesses some breathing room from the strict funding rules imposed by a landmark pension reform bill than went into effect last year. . . . 'Without additional action, January 1, 2010, will bring to bear very significant additional funding requirements,' said Pomeroy, a member of the House Ways and Means Committee. 'This is going to put extraordinary pressure on companies to freeze their pension plans.'" (Workforce Management; free registration required)

Fact Sheet on the Preserve Benefits and Jobs Act Introduced by Congressmen Earl Pomeroy and Pat Tiberi (PDF)
1 page. Excerpt: "Congressman Pomeroy and Tiberi believe Congress should pass reasonable pension funding relief to keep employees working and give them security in knowing their pensions will be there when they need them." (American Benefits Council)

House Members Introduce Pension Funding Relief Measure
Excerpt: "U.S. House Representatives Earl Pomeroy (D-North Dakota) and Pat Tiberi (R-Ohio) have introduced a bill to further ease funding requirements for defined benefit plan sponsors. The Preserve Benefits and Jobs Act expands pension funding relief provided in the Worker, Retiree and Employer Recovery Act (WRERA) in 2008 and the Department of the Treasury regulatory guidance for 2009 reducing employer contributions. The Congressmen said the funding relief would continue worker and retirees' protections against pension benefit accruals being frozen in 2009 and 2010, as enacted by WRERA, and would protect future retirees by prohibiting pension plans from being drained by lump sum ad hoc benefits to certain individuals." (PLANSPONSOR.com; free registration required)

[Guidance Overview] IRS Regulations on Pension Funding and Benefit Restrictions (PDF)
2 pages. Excerpt: "The Internal Revenue Service and the Treasury Department recently published final funding regulations for single-employer pension plans, which will generally first take effect for the 2010 plan year. Employers can also rely on these regulations for 2008 and 2009, if they choose. The regulations contain a large amount of technical details. This Bulletin gives a high-level summary of key provisions that might be of interest to private sector employers. It notes highlights of the following: The rules for determining minimum required contributions and The rules for how benefit restrictions are administered." (The Segal Group, Inc.)

Sustainable Funding Practices of Defined Benefit Pension Plans, 2009 (PDF)
3 pages. Excerpt: "Recommendation. The Government Finance Officers Association (GFOA) recommends that state and local government officials ensure that the costs of the benefits promised in public employee DB plans are properly measured and reported, in accordance with generally accepted accounting principles (GAAP)1. The GFOA believes sustainability requires that governments that sponsor or participate in a defined benefit pension plan contribute the full amount of their actuarially determined annual required contribution (ARC) each year. Failing to fund the ARC during recessionary periods impairs investment returns by depriving the fund of its opportunity to invest when stock prices are low. Long-term investment performance will suffer and ultimately require higher contributions." (Government Finance Officers Association of the United States and Canada)

[Opinion] The Colorado Public Pension Fund's Board Needs to Attach Financial Values to Complex Recovery Plan It Is Presenting to Lawmakers
Excerpt: "The board of the state's financially troubled retirement fund has come up with a rescue plan that involves a good bit of fiscal pain and sacrifice. It appears to be a commendable starting point for state lawmakers in that it involves the sort of shared sacrifice we've supported in the past. Predictably, governments -- meaning taxpayers -- would be on the hook for what could be a significant part of the bailout. And while that's concerning, a more troubling element, we think, is the failure of the Colorado Public Employees Retirement Association pension board to attach financial values -- real dollars -- to the various components of the complex plan it's presenting to state lawmakers. PERA officials told us they couldn't supply such figures. The legislature ought to demand the information before moving forward with a plan to prop up PERA, which is facing $27.5 billion in unfunded liabilities." (The Denver Post)

[Guidance Overview] IRS's Final Rule on Pension Funding and Benefit Restrictions (PDF)
2 pages. (Milliman)

[Guidance Overview] Final Regs on Benefit Restrictions for Underfunded Plans, Measurement of Plan Assets and Liabilities
Excerpt: "Underfunding presumptions: The regulations set forth a series of presumptions that are used to apply the Code Sec. 436 benefit limitations in situations where the plan's enrolled actuary has not yet issued a certification of the plan's AFTAP for the plan year and that describe the interaction of the application of those presumptions on plan operations with plan operations after the plan's enrolled actuary has issued a certification of the plan's AFTAP for the plan year. The rules in the final regulations have been revised from those in the proposed regulations." (Wolters Kluwer)

Market Decline Could Affect Public Pensions for Several Years, According to Report
Excerpt: "The Public Fund Survey sponsored by the National Association of State Retirement Administrators and the National Council on Teacher Retirement indicates that the market decline in 2008 resulted in a median investment return for public pension funds of -25.3% for the year. According to the report, the fall in asset values has caused aggregate funding levels to move downward from 86.7% in FY07 to 85.3% in FY 08. However, the report notes that because public pension actuarial methods are designed to temper the effect of market volatility, public pensions will recognize the investment losses incurred in 2008 over several years. During this recognition period, funding levels are expected to decline, although losses may be partially offset with investment gains." (PLANSPONSOR.com; free registration required)

A Call for Papers: Funding Strategies for Single Employer Defined Benefit Plans under PPA
Excerpt: "The Pension Section Research Team is seeking papers outlining effective funding strategies under PPA. It is not expected that there is a one-size fits all approach. As such, authors are encouraged to share their opinions and perspectives. Primary considerations of interest include what conditions make a given strategy appropriate, when strategies need to be reviewed and/or revised, and how robust a single strategy can be. Papers considering stochastic methodology and issues are also of interest. . . . Please submit an abstract or outline of your proposed paper by December 15, 2009 . . . ." (Society of Actuaries)

In Louisiana, Information on Current Public Retirement Plan Differs
Excerpt: "Legislators studying changes to the state employees retirement systems received contradictory information Monday on the cost and effects of closing the pension plan. However, the systems' benefit structure and debt load could be too costly to change at this time anyway, national retirement experts said. . . . The state House and Senate retirement committees heard from the systems and other national groups about defined-contribution plans, which are similar to 401(k)s and require employees to manage their own investments. . . . The meeting stems from a study resolution by House Speaker Jim Tucker, R-Terrytown, which seeks to determine the feasibility of establishing a defined-contribution plan for all new employees hired on and after July 1, 2010, in the four state public retirement systems." (The Advocate)

A ''Tipping Point'' for Public Pensions?
Excerpt: "Any discussion of the serious issues affecting public pension funds today must begin with talking about what's going on in our nation. Public pensions exist within a broader societal context and are not immune from factors affecting society in general. Further, taxpayers pay for public pensions. Therefore the mood and plight of our society and taxpayers is important to take note of in discussing the challenges facing public pensions." (Benchmark Financial Services, Inc.)

Preserving Financially Sound Defined Benefit Pensions in Challenging Market Environments (PDF)
6 pages. Excerpt: "The severe decline in the financial markets has resulted in significantly higher contribution rates for many public plans at a time when sponsoring governments are under substantial fiscal stress.As a result, many governments are looking for strategies to mitigatethis impact by managing contribution rates, changing benefits, or changing actuarial methods and assumptions. This paper discusses the advantagesand disadvantages of several approaches. However, care should be taken to understand the downside of these strategies and their likely long-term impact on plan funding." (Gabriel Roeder Smith & Company)

[Guidance Overview] 2010 Dollar Limitations for Pension Plans Unchanged
Excerpt: "The IRS has announced the cost-of-living adjustments applicable to dollar limitations for pension plans and other items for tax year 2010. The dollar limits that apply to qualified plans (and the 403(b) and 457(b) plan deferral limits) remain unchanged from 2009. Recently, practitioners had speculated whether any of the dollar limits actually would decrease for 2010, since the cost-of-living index for the quarter ended September 30, 2009, is less than the cost-of-living index for the quarter ended September 30, 2008. However, the IRS interpreted the applicable statutory provision (Code ?415(d)) to mean that any decline in the applicable index cannot result in a reduced limitation. The . . . table summarizes the key dollar limits." (SunGard Relius)

Virginia Retirement System Defers Accounting Rule to Cut Costs
Excerpt: "The board of the Virginia Retirement System agreed to an accounting change that will save the government from large contribution rate increases to fund the plan for state employees, teachers, and other public employees. The Richmond Times-Dispatch reports that the Board of Trustees voted unanimously to suspend an accounting rule that requires the state to fund the retirement plan within 20% of its fair market value. Without the change, the state would have had to raise its contribution rate for state employees and public school teachers by almost 50%." (PLANSPONSOR.com; free registration required)

Proposed Colorado Public Employees Retirement Association Pension Fund Fix Includes Greater Contributions from Workers
Excerpt: "Government workers would have to contribute more of their salaries while getting less in benefits under a plan proposed Friday to rescue the foundering Colorado Public Employees Retirement Association pension fund. PERA is facing $27.5 billion in unfunded liabilities, threatening the long-term existence of the retirement plan. The proposal unanimously approved by the PERA board Friday would require association members -- who include teachers, state-government workers, judges, college employees and municipal workers -- to contribute an additional 2 percent in the form of smaller salary hikes in the future." (The Denver Post)

[Guidance Overview] Short Summary of Final IRS Regulations on Defined Benefit Plan Funding and Benefit Restrictions (PDF)
3 pages. (American Benefits Council)

[Official Guidance] Flat-Rate PBGC Premium for Plan Year 2010 Rises to $35 for Single-Employer Plans; Unchanged at $9 for Multiemployer Plans
Excerpt: "Flat-Rate Premium Increase for Plan Year 2010: The per-participant flat-rate premium for plan year 2010 is $35.00 for single-employer plans (up from $34.00 for plan year 2009) and $9.00 for multiemployer plans (unchanged from plan year 2009). By law, the premium rates are adjusted for inflation each year based on changes in the national average wage index." (Pension Benefit Guaranty Corporation)

Most California Voters Back Proposed Public Pension Changes to Reduce Benefit Costs
Excerpt: "Californians favor changing the pension system for newly hired state and local government employees, and most back three possible scenarios that could reduce benefits, a new poll finds." (The Press-Enterprise)

[Official Guidance] Typeset Federal Register Version of Final IRS Regs on Measurement of Assets and Liabilities for Pension Funding Purposes; Benefit Restrictions for Underfunded Pension Plans (PDF)
82 pages. (Internal Revenue Service)

[Guidance Overview] Chart of 415, Etc., Limits Updated for News Release IR-2009-94
The chart of maximum limits subject to inflation indexing at Carol V. Calhoun's employee benefits site has now been amended to include the newly announced 2010 limits. Among other things, the chart shows limits under sections 415, 403(b), 401(k), and 457, as well as the Social Security wage base and Social Security and Medicare tax rates, for 1996-2010. (Calhoun Law Group, P.C.)

[Official Guidance] IRS 'Employee Plans News' - October 2009 Special Edition (PDF)
2 pages; contains hypertext links to the new final funding regulations, and a notice of an upcoming October 28 webcast about the required minimum distribution rules and the new 402(f) notice. (Internal Revenue Service)

Baltimore, MD, Police, Fire Pension Costs Could Double Next Year
Excerpt: "An unusual pension benefit for police and firefighters could cost Baltimore $164.9 million next year, nearly double what the city is now paying and a figure that the city's finance director says taxpayers cannot afford. After years of calls for pension reform, board members who oversee the nearly $2 billion system said their Tuesday vote that passes the whopping bill on to City Hall is a message that the fund is close to a breaking point and needs attention." (The Baltimore Sun)

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