Headlines about "Actuarial - misc"
Gathered from the web by the editors at BenefitsLink.com.
[Official Guidance] Submission of PBGC Information Collections for OMB Review; Comment Request; Payment of Premiums; Termination Premium
Excerpt: "Pension Benefit Guaranty Corporation . . . is requesting that the Office of Management and Budget . . . extend approval, under the Paperwork Reduction Act, of the collection of information for the termination premium under its regulation on Payment of Premiums . . . without change. This notice informs the public of PBGC's request and solicits public comment on the collection of information." (govpulse)
[Guidance Overview] September Deadline Set for Refiling Pension Overpayment Suit
Excerpt: "[The U.S. District Court] ordered that if a new suit against [the defendant] is not filed under [ERISA] by that date, [the court's] order throwing out ING's original case filed under Illinois state law will become permanent. The court ruled that the state law claims against Barrington in the original suit would be pre-empted by ERISA." (PLANSPONSOR.com)
[Guidance Overview] Ohio District Court Rejects Negligence and ERISA Claims Against Milliman (PDF)
2 pages. Excerpt: "[T]he Court concluded that the actuarial services Milliman provided to the Excavating, Building Material and Construction Drivers Union Local No. 436 Pension Fund did not violate professional standards, the parties' contract or ERISA." (Groom Law Group)
[Guidance Overview] PBGC Proposes Rule Clarifying When 'Substantial Cessation of Operations' Occurs for Single Employer Plans
Excerpt: "The regulations are not yet effective. They will apply to cessation dates that occur on or after the effective date of the final regulations, and will displace and supersede all of the PBGC's prior opinion letter pronouncements regarding ERISA ? 4062(e). Comments are requested on or before October 12, 2010." (Deloitte via BenefitsLink.com)
PBGC Proposes Clarifying Downsizing Liability Rule
Excerpt: "The PBGC proposed a clarification to a rule determining the liability when an employer shuts down a facility that leads to layoffs of more than 20% of the active participants in a defined benefit plan." (Pensions & Investments; registration may be required)
[Guidance Overview] PBGC Proposes Notice, Liability and Recordkeeping Rules for Certain Facility Closings
Excerpt: "Employers would have less wiggle room in assessing whether a facility closure causing termination of more than 20% of active participants ('4062(e) event') has occurred, under an Aug. 9 PBGC proposal." (Mercer)
[Official Guidance] Text of PBGC Final Rule: Benefits Payable in Terminated Single-Employer Plans; Interest Assumptions for Valuing and Paying Benefits (PDF)
2 pages. (Pension Benefit Guaranty Corporation)
'Overpaid' Pensions Being Seized
Excerpt: "There aren't any statistics regarding pension overpayments, but senior advocates say they have seen a spike of 'recoupment' cases, which are now one of the most common pension problems some advocacy groups are handling." (The Wall Street Journal)
[Guidance Overview] Take Care When Calculating Pensions
Excerpt: "In Bloemker v. Laborers' Local 265 Pension Fund, the U.S. Court of Appeals for the Sixth Circuit, which covers Michigan and several other Midwest states, recently ruled that 'equitable estoppel' claims may now be made against a pension benefit plan. So what is equitable estoppel? Essentially, equitable estoppel allows a court to bind a party to its intentional misrepresentations when another party unknowingly relies on those misrepresentations and is injured by that reliance." (Warner Norcross & Judd LLP)
[Guidance Overview] Equitable Reformation of Plan Permitted As ? 502(a)(3) Relief
Excerpt: "In the typical ERISA case, the scope of relief under ? 502(a)(3) poses a challenge for plan claimants. In Young v. Verizon, however, the plan sought relief under (a)(3) to avoid paying benefits according to a benefit formula that it contended contained an error." (Roy Harmon via Health Plan Law)
New PBGC Head Urged to Address Inspector General Findings Regarding UAL Plan Termination
Excerpt: "Rep. George Miller (D-CA) . . . called on . . . the new director of the PBGC to immediately address serious concerns raised by the Agency's inspector general that an auditing contractor hired by the PBGC in relation to the termination of United Airlines' . . . pension plan terminations failed to exercise due diligence and that the PBGC failed to properly oversee the contractor." (Wolters Kluwer)
Who Should Pay for the Trillion-Dollar Pension Gap?
Excerpt: "[G]iven that we've promised at least $1 trillion more in retirement benefits to public employees than we have put aside to pay for them, who should pay to make up the difference? Should it be the employees themselves who pay, through cutbacks to annual cost-of-living adjustments for current retirees or tweaks to benefits that those still working will receive?" (New York Times; free registration required)
Taming the Whale Lurking in Pension Financing: Overly Optimistic Investment Return Assumptions
Excerpt: "To make the whale work out if earnings are 7% instead of 7.75%, contributions need to be increased from 24% to 30%, starting the first date of hiring. If earnings are 6%, contributions need to be a whopping 39% of salary cost." (Pensions & Investments)
Huge Battle Looms Over Public Pensions; Who Will (Who Should) Foot the Bill?
Excerpt: "There's a class war coming to the world of government pensions. The haves are retirees who were once state or municipal workers. Their seemingly guaranteed and ever-escalating monthly pension benefits are breaking budgets nationwide. The have-nots are taxpayers who don't have generous pensions." (Mike "Mish" Shedlock)
The New Class Warfare: Private Vs. Public Worker
Excerpt: "Over the last decade, politicians . . . who sought to reform public-sector benefits, particularly pensions, argued that promises made to government workers in economic boom times no longer were affordable. But the urgency was lacking. That has changed . . . . " (Los Angeles Times)
How Local Governments are Addressing Retiree Health Care Funding
Excerpt: "This new issue brief finds that the economy has slowed the ability of local governments to address long-term funding of their retiree health care obligations. The brief follows up on a 2009 survey in which 206 local governments indicated they were likely to adopt a long-term strategy to strengthen their retiree health care funding . . . ." (Center for State & Local Government Excellence)
Recalculating Pension Risk Following Health Reform
Excerpt: "Pension managers might want to revisit life expectancy calculations in the wake of health reform . . . . Improved access to medical care could extend life span, based on the East German experience after the fall of the Berlin Wall. " (Workforce Management (free registration required))
U.S. Oversight of UAL Pension Audits Questioned
Excerpt: "The Pension Benefit Guaranty Corp . . . inspector general said in a letter to a congressional committee that the agency acknowledges some shortcomings in validating the value of the plans but does not believe they will require any changes to benefits." (Reuters)
White Paper from Congressional Budget Office: Social Security Policy Options [July 2010] (PDF)
67 pages. (Congressional Budget Office)
[Guidance Overview] Massachusetts District Court Rejects 'Prudent Investor Rate' in Favor of PBGC's Discount Rate (PDF)
Excerpt: "This ruling is one of a string of decisions that are contrary to decisions in the 1990s and 2000, which rejected PBGC's use of itsdiscount rate to determine liability for underfunded, terminated pension plans." (Groom Law Group)
[Guidance Overview] PBGC Technical Update 10-2 Provides 'Box 5' Relief Procedure for Variable Rate Premium Payers (PDF)
1 page. Excerpt: "Importantly, Technical Update 10-2 sets a tight deadline for claiming such relief. Plan administrators must send the necessary paperwork to PBGC within 30 days of the later of ? the date of issuance of the Technical Update, or the date the comprehensive premium filing for the applicable plan year is due." (Groom Law Group)
[Official Guidance] Text of PBGC Technical Update 10-2: Variable Rate Premiums; Alternative Premium Funding Target Elections; Box 5 Relief
Excerpt: "[Technical Update 10-2] makes relief available to plans thatintended to elect to use the alternative premium funding target tocalculate the variable rate premium but did not check the appropriatebox on the comprehensive premium filing, if certain conditions are met.The Technical Update sets forth the scope of the relief and the processfor obtaining it." (Pension Benefit Guaranty Corporation)
GASB Reaffirms in General the Use of Expected Long-Term Return on Investments As Basis for Valuing Public Pension Plan Liabilities
Excerpt: "The continued use of the traditional valuation method would apply to plans so long as the assets available for benefits are projected to be sufficient to cover future benefits." (Pensions & Investments)
[Guidance Overview] Alliant Energy Corp. Tagged for Pre PPA Whipsaw Calculation for Lump-Sum Distributions
Excerpt: "U.S. Judge Barbara B. Crabb of the U.S. District Court for the Western District of Wisconsin asserted that the company ran afoul of the Employee Retirement Income Security Act (ERISA) with the calculations, but said she could not determine the correct rate the company should have used before the Pension Protection Act of 2006 (PPA). The PPA amended ERISA to provide that cash balance plans are no longer required to make whipsaw calculations." (PLANSPONSOR.com)
[Official Guidance] Disaster Relief Announcement 10-11 Relating to PBGC Deadlines in Response to Severe Storms and Flooding in Connecticut
Excerpt: "Pension Benefit Guaranty Corporation ('PBGC') is waiving certain penalties and extending certain deadlines in response to the severe storms and flooding that occurred on March 12, 2010, in Connecticut." (Pension Benefit Guaranty Corporation)
[Official Guidance] PBGC Response Regarding Variable Rate Premium Filings (PDF)
2 pages. (Pension Benefit Guaranty Corporation)
PBGC Unveils Premium Filing Checkbox Relief
Excerpt: "The Pension Benefit Guaranty Corporation (PBGC) announced on Tuesday that it will provide relief to certain premium filers who used the available premium funding target (APFT) to determine the variable-rate premium (VRP), but did not check the appropriate box on the comprehensive premium filing." (PLANSPONSOR.com)
Senators 'Express Concern' to PBGC About Rejecting Certain Premium Filings
Excerpt: "Defined benefit plan sponsors that intended to pay their 2009 plan premiums to the Pension Benefit Guaranty Corporation using an alternative method, but failed to check the correct box, are being unfairly penalized, four senators said in a letter sent to the agency . . . 'As a result, plans are facing millions of dollars in additional premiums, as well as interest and penalties,' the letter said. [Click on the title under 'Items of Interest' on the target page.]" (Keightley & Ashner LLP)
Taxpayers Could Be on the Hook for $165 Billion If Bill to Bail Out Private Union Pension Funds Makes It Through Congress
Excerpt: "The bill, which would put the Pension Benefit Guarantee Corporation behind struggling pensions for union workers, is being introduced by Senator Bob Casey, (D-Pa.), who says it will save jobs and help people." (FOX News Network, LLC)
$34 Billion Shortfall Estimate Sparks Renewed Talk of Taxpayer Help for PBGC
Excerpt: "However, not all agree on the need for a bailout, with some pension industry analysts saying concerns about the PBGC's health are way overblown -- at least in the short term. They say the PBGC, which had $68.7 billion in assets as of Sept. 30, 2009, has plenty of cash to pay off the pension benefit obligations of the plans it takes over for years." (Pensions & Investments; login or registration may be required)
PBGC Seeing Increase in Litigation Against Agency by Participants, Official Says
Find title under 'Items of Interest' on the target page. Excerpt: "PBGC's Morris said many participants were unhappy about the difference in the amount of benefits they were expecting at retirement under their previously viable defined benefit plan and the amount they received after their plan was taken over by PBGC." (Keightley & Ashner LLP)
[Opinion] The Case for Requiring 401k Plans to Hire Actuaries
The Obama Administration has taken a step in the right direction by getting more employees to enroll in the plans. The least they can do is give Americans access to the math whizzes who help make pensions work in this country. If we choose to stick with the status quo, retirement is not an option for most Americans. (Contingencies)
PBGC Holds Firm on Rejection of 2009 Premium Filings
Excerpt: "Responding to concerns raised by the American Benefits Council, PBGC Acting Director Vincent Snowbarger asserted the filing instructions were clear and 'it is appropriate to enforce these requirements, particularly when they are challenged only after-the-fact.' While PBGC may waive some penalties, affected plans could still owe higher premiums, so ABC and others continue to press for relief." (Mercer LLC)
PBGC Semiannual Regulatory Agenda Addresses Cash Balance Plans, Missing Participant Program
Excerpt: "The items slated for Long-Term Actions include the following: Assessment of and relief from information penalties. A proposed rule to amend PBGC's regulation on Payment of Premiums (29 CFR part 4007). A proposed amendment to the PBGC's benefit valuation and asset allocation regulations." (Wolters Kluwer)
IASB Issues Exposure Draft Proposing Major Changes to Pension/OPEB Accounting
Excerpt: "The IASB proposal would significantly change an employer's recognition of its defined benefit obligations and costs. . . . This [article] provides a high-level overview of the [exposure draft]." (PriceWaterhouseCoopers)
[Opinion] Public Pension Fund Underfunding Is a Manageable Challenge
Excerpt: "The deep financial downturn of 2008 and 2009, spurred by recklessness on Wall Street, caused significant problems in many pension funds. But our public pension plans are designed for long-term stability, and virtually all of them have sufficient resources to weather this financial storm." (Gerald W. McEntee in USA TODAY)
[Opinion] Ugly Truth About State Pensions Begins to Emerge
Excerpt: "Many states have lavish programs that allow workers to retire in their 50s with ample pensions -- and health insurance to cover them until Medicare kicks in. Second, regardless of how generous their benefits, some states have simply failed to put away adequate funds to cover them." (USA TODAY)
[Opinion] In 2010 National Elections, Are Public Sector Employees the Democrats' Achilles Heel?
Excerpt: "The Democrats can't walk away from the public employee unions who negotiated these arrangements because they are beholden to them." (PowerlineBlog.com)
Chart of DOL's 2010 Regulatory Agenda for Employee Benefit Matters (PDF)
3 pages. Excerpt: "DOL's agenda and related materials include 20 pending projects related to employee benefits, which are listed below in order of the projected timetable for next steps. (In the ordinary course, dates projected in the agenda may prove ambitious.) New projects highlighted by DOL are shown in bold." (Sutherland)
[Guidance Overview] Plan Sponsors Make Many Mistakes In Premium Filings, PBGC Speaker Says (PDF)
Excerpt: "The biggest mistake PBGC is seeing is plans using the alternative premium funding target even though they did not elect to do so because the plan administrators thought they already had elected it in 2008 . . . ." (Pension Benefit Guaranty Corporation)
Financial Reporting Implications of Health Care Legislation
5 pages. Excerpt: "This [article] describes a number of potentialimplications of the new legislation for an employer's accounting for postretirement benefits other than pensions. . . . Although it can be challenging, employers are required to estimate the impact of the Act on their [accumulated postretirement benefit obligation]." (PriceWaterhouseCoopers)
California Public Employees' Retirement System Experience Study, 1997 to 2007 (PDF)
69 pages. Excerpt: "The purpose of this experience study is to compare the actual experience of the system against the current recommendations and to recommend new actuarial assumptions for rates of decrement and salary increase. The report presents the results of the experience study ofplans that participate in the California Public Employees Retirement Fund (State, schools and public agencies). The report is derived from data collected during fiscal years 1997 to 2007." (California Public Employees? Retirement System)
[Official Guidance] PBGC Letter to American Benefits Council Regarding Variable Rate Premium Issues (PDF)
2 pages. (Pension Benefit Guaranty Corporation via American Benefits Council)
[Opinion] American Academy of Actuaries' Comments on Proposed Revision of Actuarial Standard of Practice No. 41 (PDF)
4 pages. Excerpt: "The Pension Committee of the American Academy of Actuaries1 appreciates the opportunity to provide comment on the Actuarial Standards Board's proposed revision of ASOP No. 41, Actuarial Communications." (American Academy of Actuaries)
The Defined Benefit Plan's Many Problems
Excerpt: "DB plans were instituted by people who had the best intentions for helping employees experience a wonderful life during their retirement years. Moreover, the removal of retirement planning burdens from the employee's responsibility and placing them upon the employer is also a significant advantage of the DB plan structure. However, upon examination, it becomes obvious that valuation errors associated with the estimation of pension liabilities poses an unavoidable problem. In addition, the accounting provisions associated with booking net pension liabilities on the balance sheet of a company, instead of booking both the pension asset and pension liability, raises many additional issues that fly in the face of prudent corporate governance." (San Francisco Chronicle)
New Bill Could Increase PBGC's Liability
Excerpt: "Legislation that would require the PBGC to subsidize the pension benefits of participants of companies that drop out of multiemployer pension plans was announced today by Sen. Bob Casey, D-Pa." (Pensions & Investments)
'Life-Swapping': The Case for and Against Longevity Swaps: Could U.S. Pension Plans Reduce Risk?
Excerpt: "The idea is that market participants could make opposing bets on how long people will live. This would allow insurance companies and pension funds to hedge their risks of beneficiaries living too long. They would either pay an up-front premium, or a stream of payments when people die prematurely. This would enable life insurance companies to reduce their mortality risk of people dying too soon -- while annuity insurers and pension funds could take the opposite position and receive compensation if people outlive their actuarial assumptions." (Governing)
[Official Guidance] Text of Request by EBSA and IRS for Information Regarding Lifetime Income Options for Participants and Beneficiaries in Retirement Plans (PDF)
6 pages. Excerpt: "What are the advantages and disadvantages for participants of selecting lifetime income payments through a plan (in-plan option) as opposed to outside a plan (e.g., after a distribution or rollover)? . . . What are the advantages and disadvantages from the standpoint of the plan sponsor of providing an in-plan option for lifetime income as opposed to leaving to participants the task of securing a lifetime income vehicle after receiving a plan distribution? . . . How commonly do plan sponsors offer participants the explicit choice of using a portion of their account balances to purchase a lifetime annuity, while leaving the rest in the plan or taking it as a lump sum distribution or a series of ad hoc distributions? Why do some plan sponsors make this partial annuity option available while others do not?" (Employee Benefits Security Administration; Internal Revenue Service)
PBGC Aids Insolvent Multiemployer Pension Plans
Excerpt: "The insurance program for multiemployer plans differs from its single-employer program. The PBGC actually takes over failed single-employer plans but does not take over insolvent multiemployer plans. Instead, it sends financial assistance to the plan to ensure that guaranteed benefits are paid." (Workforce Management; free registration required)
[Guidance Overview] IRS's Final Defined Benefit Plan Funding Regulations (PDF)
6 pages. Excerpt: "The proposed regulations provided that all employees who are not otherwise assumed to retire as of the valuation date, but who will be eligible to begin benefits in the current year and 10 succeeding plan years, are assumed to retire at the earliest retirement date under the plan, but not before the end of the current plan year. The final regulations clarify that these early retirement assumptions apply to all participants . . . who have not begun receiving payments. In addition, the 'earliest retirement age' cannot be earlier than the age at which the participant's benefit is fully vested." (Prudential Retirement)
[Guidance Overview] IRS Final Benefit Restriction Regulations (PDF)
6 pages. Excerpt: "These developments affect sponsors of and participants in qualified single-employer and multiple employer defined benefit plans." (Prudential Retirement)
[Opinion] American Academy of Actuaries Letter Highlighting Some Key Differences on Actuarial Issues Between the House's Affordable Health Care for America Act and the Senate's Patient Protection and Affordable Care Act (PDF)
21 pages. Excerpt: "In particular, this letter discusses various aspects of the House and Senate bills, and provides specific comments on provisions related to: issue and rating rules / individual mandate,grandfathering, medical loss ratios, benefit provisions regarding medical necessity, risk sharing, the creation of new health insurance plan options, an excise tax on employer-sponsored insurance, and the CLASS Act. Following is an executive summary of more extensive remarks made later in this document." (American Academy of Actuaries)
Technical Report: Excise Tax on High-Cost Employer Plans in Federal Health Care Reform (PDF)
28 pages. Excerpt: "In order to assist policymakers and the public in determining the implications of the proposed excise tax, a joint work group . . . developed a model to estimate the revenue it would generate. This model also analyzes the possibility that employers would reduce or eliminate benefits in order to avoid paying the tax, which would reduce revenue from the excise tax but could also have other effects. These effects include reducing health care spending and increasing income and payroll taxes to the extent that compensation shifts from health benefits to wages." (American Academy of Actuaries / Society of Actuaries)
PBGC Extends Protection to Pensions of Eight Companies Since End of December
Excerpt: "The underfunded pension plans of eight companies with a combined US$236.3m in assets have fallen into the Pension Benefit Guaranty Corporation in less than a month. The PBGC has estimated it would be responsible for an extra US$314m in pension liabilities." (Global Pensions)
[Guidance Overview] New Resources for Assumption-Setting (PDF)
Pages 1, 7 of 8 pages. Excerpt: "The Academy's Pension Committee issued two practice notes in October to provide information to actuaries on current and emerging practices in the selection and documentation of mortality assumptions and other pension assumptions for measuring obligations of defined benefit pension plans and other post-retirement benefit plans." (American Academy of Actuaries)
Intricately Linked: Pensions and Corporate Financial Performance (PDF)
17 pages. Excerpt: "[Towers] Perrin has developed this publication to update our 2003 guidebook, Pensions and Corporate Financial Performance -- Keeping Your Eye on the Ball. This new edition reflects the many changes that have since occurred in the environment of pension plan management. In addition, an upcoming companion publication will delve into more detail in each of the policy areas discussed here, focusing on specific actions that can be taken in these areas to achieve policy goals." (Towers Perrin)
GASB Issues OPEB, Bankruptcy Guidance Statements
Excerpt: "The rulemaking organization has released Statement No. 57, OPEB Measurements by Agent Employers and Agent Multiple-Employer Plans and Statement No. 58, Accounting and Financial Reporting for Chapter 9 Bankruptcies." (PLANSPONSOR.com)
IRS Explains New Defined Benefit Automatic Approval Procedure
Excerpt: "Saying it has gotten 'numerous' questions from single-employer defined benefit plan sponsors or their actuaries about changes in plan valuation software, Internal Revenue Service (IRS) officials on Thursday said they would grant automatic approval of the method changes under certain circumstances." (PLANSPONSOR.com)
[Opinion] As Times Change, Should Our Assumptions? (PDF)
Excerpt: "With the new funding methodology and prescribed assumptionsmandated by the Pension Protection Act of 2006, some of thetraditional discretion in the selection of assumptions has vanished.However, there are still assumptions that remain within theprofessional judgment of the actuary." (James Turpin via American Academy of Actuaries)
[Official Guidance] Text of IRS Announcement 2010-3: Automatic Approval of Changes in Funding Method for Takeover Plans and Changes in Pension Valuation Software (PDF)
4 pages. Excerpt: "This announcement provides, for plan years beginning on or after January 1, 2009, automatic approval for certain changes in funding method with respect to single-employer defined benefit plans that result either from a change in the valuation software used to determine the liabilities for such plans or from a change in the enrolled actuary and the business organization providing actuarial services to the plan. This guidance is being provided in response to numerous requests from actuaries and plan sponsors, many of whom are continuing to modify their valuation software in order to implement the changes to the funding rules made by [PPA '06], [WRERA '08], and guidance regarding these legislative changes." (Internal Revenue Service)
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