Headlines about "Actuarial - misc"
Gathered from the web by the editors at BenefitsLink.com.
[Opinion] New Book Explains How 'Pension Monster' of Unfunded Benefit Liabilities Guts GM, Halts NYC Subways, Bleeds San Diego
Excerpt: "Pensions resemble a reverse neutron bomb: They gut cities and factories, yet leave armies of retirees standing, unscathed and ready for that Caribbean cruise. If you don't believe me, dip into Roger Lowenstein's troubling financial fable, 'While America Aged.' The three narrative histories presented here outline how pensions drove General Motors Corp. to the brink, brought New York subways to a halt, and turned sunny San Diego into Enron-by-the-Sea." (James Pressley on Bloomberg.com)
[Opinion] San Francisco Has Plan for Stemming Retiree Health Benefit Costs, But It Could Be Better
Excerpt: "The good news about San Francisco's Proposition B is that it represents a rare effort by a local government to confront its daunting long-term liability for its retirees. Governments at all levels have been ignoring a fiscal time bomb: Their binding promises to provide workers with lifetime health care benefits, without putting away any money to prepare for the cost. The bad news about Proposition B is that it is more complicated and less effective than it could have been." (San Francisco Chronicle)
ASPPA Rolls Out Professional Services Directory of ASPPA Members, Available for Use by Public
Excerpt: "Please select the professional services that you require, then you may select to search by zip code and mile radius or city, state and mile radius. . . . Please select one or more services . . . : 401(K)/Defined Contribution Services; Actuarial and Defined Benefit Services; Compliance and Fiduciary Services; Investment Services' [ASPPA membership information is online at http://www.asppa.org/membership/member_join.htm] (American Society of Pension Professionals and Actuaries)
[Opinion] Letter to FASB on Proposed Staff Position on Disclosure of Retirement and Other Post-Retirement Benefits (PDF)
5 pages. Excerpt: "As the chief investment officers for 110 major private-sector retirement plans, CIEBA members recognize the desirability of increased transparency and comparability in the financial statements of public companies. However, we posit that the proposals contained in this FSB will not lead to a meaningful increase in transparency and may reduce comparability." (Committee on Investment of Employee Benefit Plan Assets)
[Guidance Overview] 'Issueman' Tackles the New VEBAs: There is Much to Say
Benefits attorney Steven J. Sacher encounters his cynical old friend Issueman on a bench in D.C.; in this amusing and insightful 6-page account and transcript of their conversation, Issueman has a great deal to say and ask about the legal aspects of VEBAs for retiree healthcare liabilities. An excellent overview. (Reprinted from the BNA Pension & Benefits Reporter)
[Guidance Overview] Calculating Lump Sums After PPA
Excerpt: "In our view, retaining the traditional approach to determining actuarial equivalence is perfectly defensible. To suggest that a result is wrong because it produces an answer 0.05% different from another approach is to impute a false level of precision to these calculations generally. All approaches require some kind of judgment about within-year mortality." (JPMorgan Chase & Co.)
[Guidance Overview] Analysis of PBGC's Final Rule Implementing Variable-Rate Premium Changes (PDF)
9 pages. Excerpt: "PBGC premium rules continue to undergo significant change, with dollar consequences that are on the rise for many plans. Understanding not only the PPA statutory changes slated to go into effect starting with the 2008 plan year, but also PBGC's final rule implementing these and other changes to its regulations, will greatly help the practitioner in providing affected clients with the advice they need." (The Bureau of National Affairs, Inc. via Keightley & Ashner LLP)
[Opinion] PAPO = Pension Actuary Pecking Order
Excerpt: "Pension actuaries are a little like doctors, less about 5 years of advanced pre-training and fewer malpractice worries since we've sufficiently complicated simple concepts to dissuade even trial lawyers from wading through our rationales. We've had this regulatory lattice since ERISA in 1974 with changes periodically when either the government needs money or a spate of plans fail." (John Bury via nj.com)
The Role of Actuarial Audits in Performing Due Diligence (PDF)
3 pages. Excerpt: "This article discusses actuarial audits as a due diligence tool for plan trustees. High quality actuarial work can do much to ensure the long-term soundness of a pension plan. Similarly, low quality actuarial work, left undiscovered, can undermine a plan's financial security in a fairly short time." (Gabriel Roeder Smith & Company)
[Guidance Overview] PBGC Issues Final 'Variable-Rate Premium' Regulations to Implement PPA Changes Effective for Plan Years after 2007
Excerpt: "The PPA did not change the variable-rate premium (VRP) rate: it continues to be $9.00 for each $1,000 (or fraction thereof) of unfunded vested benefits (UVB). However, the PPA repealed the 'full-funding exemption' and made certain other changes designed to conform the VRP to the new funding rules. These latter changes are the primary focus of the regulations." (Deloitte via BenefitsLink.com)
[Guidance Overview] Final PBGC Regulations for Calculating the Variable-Rate Premium also Revise Filing Deadlines
Excerpt: "In addition to having to pay a flat-rate, per-capita premium to the Pension Benefit Guaranty Corporation (PBGC),1 sponsors of single employer pension plans must pay a variable-rate premium (VRP), which depends on the value of their unfunded vested benefits. The Pension Protection Act of 2006 (PPA'06) changed the funding rules on which the VRP is based and eliminated the full-funding limit exemption from the VRP." (The Segal Group, Inc.)
Pension Turbulence for Airline Employees
Excerpt: "It's not just the airline industry. Across the United States, companies feeling the squeeze from low-cost foreign competition, new technology, rising oil prices, recession and changing consumer patterns -- ranging from Rust Belt steel, textile and auto parts makers to white-collar insurance giants -- have found that when they need to save money, their 'legacy' defined benefit pension plans are one of the most convenient places to cut. [This article is adapted from 'Pension Dumping: The Reasons, the Wreckage, the Stakes for Wall Street,' by Fran Hawthorne (Bloomberg Press, April 2008).]" (NewsDay)
[Guidance Overview] Notice 2008-30 - Guidance on PPA Changes to Distribution Rules for 2008
Excerpt: "Notice 2008-30 provides guidance on distribution-related provisions of the Pension Protection Act of 2006 (PPA) that are effective in 2008, including rollovers from eligible retirement plans to Roth IRAs, additional survivor annuity options, and interest rate assumptions for lump sum distributions. The notice also provides guidance regarding plan amendments for certain gap-period earnings." (McKay Hochman Co., Inc.)
[Guidance Overview] Proposed IRS Regs Amend Notice Requirements for Benefit Accrual Reductions
Excerpt: "The IRS has issued proposed regulations which would amend the requirements for providing notice to certain affected persons when a plan significantly reduces benefit accruals. The proposed regulations set forth timing rules for ERISA §204(h) notices for plan amendments reducing benefit accruals which are permitted to be effective before the applicable amendment date, and reflect other changes to notice requirements made by the Pension Protection Act of 2006 (PPA; P.L. 109-280)." (Wolters Kluwer)
[Guidance Overview] Final PBGC Premium Payment Regs Provide Limited Waiver of Penalty to Allow Time to 'True-Up' Estimates
Excerpt: "The Pension Benefit Guaranty Corporation (PBGC) has issued final regulations that provide for a limited waiver of the penalty for failure to pay premiums to allow large and mid-size plans time to 'true-up' estimated premium payment liabilities. Interest during the 'true-up' period, however, is not suspended." (Wolters Kluwer)
[Guidance Overview] New Multiemployer Plan Disclosure Requirements - ERISA Section 101(k) (PDF)
Pages 5-7 of 8 pages. Excerpt: "If they haven't done so already, multiemployer pension plan administrators should start gathering actuarial and financial reports prepared for their plans in prior years so they can respond quickly to requests for such information pursuant to a new provision that became effective on January 1, 2008 for calendar year plans." (Trucker Huss)
[Opinion] News That Pension Benefit Guaranty Corporation Will Diversify Portfolio to Include More Equities Ought to Concern Taxpayers
Excerpt: "The PBGC is a quasi-government agency -- a 'federal corporation' -- created in 1974 to guarantee pension benefits for U.S. workers and retirees. Operating as both an insurance business and pension fund, it is financed by corporate premiums and the assets it inherits when taking over failed pension plans. By the end of last year, the agency had amassed a $14 billion deficit, and the new policy is designed to erase that red ink with higher investment returns." (The Wall Street Journal)
[Official Guidance] Text of Final PBGC Regs on Premium Rates and Payment of Premiums for 2008, Reflecting PPA Changes (PDF)
The final rule amends PBGC's regulations on Premium Rates and Payment of Premiums. The amendments implement provisions of the Pension Protection Act of 2006 that change the variable-rate premium for plan years beginning on or after January 1, 2008, and make other changes. The related premium instructions for 2008 final e-filings (now called Comprehensive Filings) have been updated to incorporate the final rule. (Pension Benefit Guaranty Corporation)
PBGC to Publish Final Rules on Premium Rates
Excerpt: "The Pension Benefit Guaranty Corporation (PBGC) announced it will publish a final rule to amend PBGC's regulations on Premium Rates and Payment of Premiums in the Federal Register on March 21.' (PLANSPONSOR.com; free registration required)
[Guidance Overview] Actuarial Equivalence for Prescription Drug Plans and Medicare Advantage Prescription Drug Plans under the Medicare Drug Program (PDF)
Excerpt: "The purpose of this practice note is to provide guidance to the actuary certifying to the actuarial equivalence of a PDP or a MA-PD under the requirements of 42 CFR 423.265 and is based on interpretations of 42 CFR 423.265 and current CMS guidelines and requirements." (American Academy of Actuaries)
Practice Note on Disease Management (PDF)
37 pages. Excerpt: "Practice Notes from this work group describe what the work group believes to be the common practices of U.S. health actuaries. This Practice Note discusses some common approaches to evaluation in the disease management field." (American Academy of Actuaries)
[Official Guidance] Text of IRS Notice 2008-30: Certain Disribution-Related Provisions of PPA That Are Effective in 2008 (PDF)
10 pages. Excerpt: "This notice [provides] guidance on amending plans to require that distribution of excess deferrals includes earnings from the end of the taxable year to the date of distribution ('gap-period' earnings). . . . The sections of PPA '06 addressed in this notice are § 824 (relating to rollovers from eligible retirement plans to Roth IRAs), § 1004 (relating to additional survivor annuity options), and § 302 (relating to interest rate assumptions for lump sum distributions)." (Internal Revenue Service)
[Official Guidance] Text of IRS Notice 2008-29: Mortality Tables for Benefits to Disabled DB Plan Participants (PDF)
3 pages. Excerpt: "This notice provides guidance regarding the mortality tables that are permitted to be used to determine present values with respect to individuals who are entitled to benefits under a qualified defined benefit pension plan on account of disability. This notice reflects changes to the minimum funding requirements made by the Pension Protection Act of 2006, Pub. L. 109-280 (PPA '06). . . . Until further guidance is issued, the rules of Rev. Rul. 96-7 (including the mortality tables set forth in Rev. Rul. 96-7 as well as the rules regarding the determination of whether a benefit is payable on account of disability) apply under §§ 430(h)(3)(D) and 431(c)(6)(D)(v)." (Internal Revenue Service)
[Official Guidance] Urgent: Most IRS Enrolled Actuaries Must Mail Renewal Form On or Before March 1
The IRS notes at the target page that enrolled actuaries will not be sent an email or letter about renewal of the enrollment of enrolled actuaries. Form 5434-A (Rev. January 2008) is to be used by all individuals enrolled before January 1, 2008 who wish to have their renewal effective as of April 1, 2008; a $250 fee and reporting of continuing education hours is required. The instructions to the form say it must be 'received' by the IRS by March 1, 2008, but the target web page merely states, 'If your renewal is postmarked on or before March 1, 2008, you may begin using the '08-' prefix on April 1, 2008, even if you have not received notification of renewal by the Joint Board." (Internal Revenue Service)
[Guidance Overview] CRS Study Evaluates Effect of PPA on Lump-Sum Distributions
Excerpt: "The changes to the rules used for calculating minimum lump-sum distributions made by the Pension Protection Act of 2006 (PPA, P.L. 109-280) would tend to have the effect of substantially reducing lump-sums for younger participants, especially after 2011, and minimally reducing lump-sums for older participants, especially prior to 2011, according to a study by the Congressional Research Service (CRS)." (CCH Pension and Benefits)
[Opinion] The Case for Cash LTC Insurance Products
Excerpt: "Criticism has recently targeted innovative benefit designs such as so-called 'cash' products. Cash products pay eligible insureds cash based on standard benefit triggers, versus the standard model of reimbursing paid services. Some believe cash products cannot be actuarially sound." (National Underwriter; free registration required)
Moving Beyond Retrospective Testing for LTCI Reserves
Excerpt: "It has long been accepted among actuaries that retrospective -- or 'retro' testing -- is a blunt tool when it comes to establishing the ongoing adequacy of claim reserves for blocks of long-term care insurance. . . . Retro tests have a number of weaknesses. To begin with . . . ." (Milliman)
Finding a Solution for Retiree Health and Disability Benefits in the Public Sector
Excerpt: "In valuing these benefits, actuaries will be making assumptions for benefit costs (pre 65 and post 65 retiree benefits), health care cost inflation (trend) rate, interest discount rate, retirement rates, turnover rates, disability rates, mortality rates, aging assumptions (age/sex factors), asset return on investments (if any of the entities are funding benefits), salary increases if benefits or funding is based on salary (e.g., life insurance), plan participation percentage (some individuals may opt out) and actuarial cost methods. . . . Some of the approaches taken [to mitigate these liabilities] include: . . . ." (The Actuary Magazine)
Health Care Costs Higher for Healthy Individuals Over Lifetime, Study Finds
Excerpt: "Lifetime health care costs for obese individuals and smokers are lower than those for healthy individuals who live years longer, according to a study Monday on the Web site of the Public Library of Science Medicine . . . ." (KaiserNetwork.org)
California Research Bureau Report Highlights Concerns About Actuarial Practices for Public Employee Benefits
Excerpt: "The California Research Bureau (CRB) at the California State Library has released a report that explains in plain language how actuarial practices determine funding levels for public employee pensions and retiree health benefits." (State of California)
[Official Guidance] IRS Rev. Rul. 2008-07: Backloading Rules as Applied to Traditional DB Plan Converting to Cash Balance Plan Prior to PPA '06 (PDF)
Analyzes a hypothetical traditional pension plan that was converted into a cash balance pension plan prior to the effective date of the new conversion requirements under the Pension Protection Act of 2006. In the ruling participants had their pensions determined using the greater of (1) the benefit under a continuation of the pre-conversion plan formula for a limited number of years after the conversion date and (2) the benefit under the new cash balance formula. The ruling illustrates how, under the current regulations, the backloading rules apply to this scenario. The ruling provides relief to ensure that plans that have requested or received a determination letter from the IRS and certain other plans will not be disqualified for plan years beginning before January 1, 2009 solely because the plan provides benefits based on the greatest of two or more formulas. Treasury and the IRS anticipate proposing amendments to the regulations that will allow separate testing of backloading with respect to the scenario under the revenue ruling and other 'greater of' formulas. The regulations will be proposed to be effective for plan years beginning on or after January 1, 2009. (Internal Revenue Service)
[Guidance Overview] IRS Issues PPA Lump Sum Guidance (PDF)
2 pages. Excerpt: "A defined benefit pension plan must determine the present value of a lump sum payment using the 'applicable interest rate' and the 'applicable mortality table' provided by the IRS. The Pension Protection Act of 2006 (PPA) redefined both of these terms and the IRS has recently provided guidance regarding these requirements." (Prudential Retirement)
The Implementation of GASB 45 - Case Studies of 15 Counties
62 pages. Excerpt: "Once a government learns its OPEB liabilities from the actuarial valuation, the government needs to develop an approach to complying with GASB 45. To help governments think about what would work best for them, the report discusses components of an implementation plan, including the implementation philosophies a government should consider, the types of persons that need to consulted in implementation and timing for implementation." (National Association of Counties)
Final Reg: PBGC Interest Rates for Use with Terminating Single-Employer Plans with February 2008 Valuation Dates (PDF)
2 pages. Excerpt: "Three sets of interest assumptions are prescribed: (1) A set for the valuation of benefits for allocation purposes under section 4044 (found in Appendix B to Part 4044), (2) a set for the PBGC to use to determine whether a benefit is payable as a lump sum and to determine lump-sum amounts to be paid by the PBGC (found in Appendix B to Part 4022), and (3) a set for private-sector pension practitioners to refer to if they wish to use lump-sum interest rates determined using the PBGC's historical methodology (found in Appendix C to Part 4022)." (Pension Benefit Guaranty Corporation)
Overview: New Rules for Minimum and Maximum Funding (PDF)
Page 6 of 8 pages. Excerpt: "As a result of the Pension Protection Act of 2006 (PPA), all of the rules for minimum required contributions and maximum deductible contributions have changed. Beginning in 2008, say goodbye to the Section 412 funding standard account, additional funding charges, and full funding limits. Under Section 430, we meet funding targets, funding shortfalls, target normal costs, and shortfall amortization bases, installments, and charges." (American Academy of Actuaries)
Overview: PBGC Semiannual Regulatory Agenda Proposes Changes to Comply with PPA
Excerpt: "The PBGC is in the process of finalizing regulations covering some of the following topics: replacement of policy statements concerning penalties with an updated and expanded set of information penalty policies codified in its regulations. implementation of changes in the rules for computing the variable-rate premium to implement provisions of the PPA." (Wolters Kluwer Financial Services)
Overview: Lump-Sum Pension Payments: 2008 and Beyond, Summary Updated Dec. 20, 2007 (PDF)
6 pages. (Milliman)
Overview: PBGC Issues PPA Transitional Guidance: Minimum Lump Sums and Standard Terminations (PDF)
4 pages. Excerpt: "We now focus on recent PBGC guidance in Technical Update 07-3 highlighting the importance of selecting a termination date -- not just a distribution date -- in the 2008 (rather than 2007) plan year to be able to use the PPA lump sum assumptions for 2008 distributions. (For convenience, this ASPPA asap assumes that the distribution date is the annuity starting date, as does PBGC Technical Update 07-3.)" (ASPPA via Keightley & Ashner LLP)
Most PBGC Retirees Get Full Earned Benefit, Study Shows
Excerpt: "The vast majority (84%) of retirees who receive benefits from the PBGC's pension insurance program are paid the full benefit amount they earned under their retirement plan. This is one of the many findings of the 2006 edition of the Pension Insurance Data Book, an annually updated statistical reference that tracks the experience of the PBGC's insurance programs and the defined benefit pension plans they protect." (Wolters Kluwer Financial Services)
Final IRS Regs: User Fees Relating to Enrollment To Perform Actuarial Services; Up From $25 to $250 (PDF)
2 pages. User fee for enrollmenat and renewal of enrollment for enrolled actuaries increases from $25 to $250, effective January 22, 2008. (Internal Revenue Service)
Overview of Lump-Sum Pension Payments: 2008 and Beyond (PDF)
7 pages. (Milliman)
Overview: Lump-Sums for Plans Terminating Before, but Distributing After January 1, 2008
Excerpt: "The PBGC has issued guidance, in the form of a Technical Update, for plans with termination and final distribution dates which straddle the effective date for PPA-required changes in the interest rate and mortality assumptions for lump-sum valuations." (Wolters Kluwer Financial Services)
Overview: PBGC Announces Flat-Rate Premium for 2008 Payment Years
Excerpt: "The Pension Benefit Guaranty Corporation (PBGC) has announced the Single-Employer Program's inflation adjusted flat-rate premium will be $33.00 per participant in 2008, up from $31 this year." (Deloitte via BenefitsLink.com)
Changes in Employee Benefits You Should Be Thinking About as 2007 becomes 2008
Discusses change in minimum vesting requirement, single-sum distributions from defined benefit plans, more. Excerpt: "In our field of law, the wonder and anticipation of the holidays are always joined by two other year-end phenomena: effective dates and deadlines. This eBenefits Alert discusses the most significant changes in the employee benefits arena that we should be thinking about as 2007 becomes 2008. Links to more detailed discussions are included for some topics." (Gray Plant Mooty)
Overview: PBGC Guidance for Terminations and Lump Sum Distributions Straddling January 1st, 2008
Excerpt: "For plan years beginning on or after January 1, 2008, the Pension Protection Act amended Code section 417(e)(3), changing the applicable interest rate and applicable mortality table. For single employer defined benefit plans terminating before January 1, 2008, this change created a potential lump sum valuation issue because a plan could be terminated before January 1, 2008, but not distribute until after January 1, 2008, meaning the plan could terminate under the old definition of actuarial equivalence, and distribute under the new definition of actuarial equivalence. The PBGC has clarified this situation . . . . " (Pension Protection Act Blog)
Fewer PBGC Retirees Getting Full Earned Benefits
Excerpt: "Eighty-four percent of the retirees who receive benefits from the federal pension insurance program receive the full benefit amount they earned under their retirement plans, according to the 2006 edition of the Pension Benefit Guaranty Corporation's Pension Insurance Data Book, which was released last week. In a 1999 study, the figure was 94 percent." (Occupational Health & Safety)
Text of PBGC Technical Update 07-3: Minimum Lump Sum Assumptions for Terminating Single-Employer Plans; Effect of Pension Protection Act of 2006
Excerpt: "This Technical Update 07-3 provides guidance on lump sum valuation issues for single-employer plans that terminate in a standard termination pursuant to ERISA section 4041, with a termination date prior to, and a final distribution date on or after, the effective date of changes in the interest rate and mortality table used in calculating minimum lump sum values under the Pension Protection Act of 2006 ('PPA 2006')." (Pension Benefit Guaranty Corporation)
November 2007 Employee Benefits Update from Reinhart Boerner (PDF)
9 pages. Nice overview for retirement and health plans, including selected compliance deadlines and a discussion of IRS guidance on yield curve and segment rates for calculating pension plan funding and lump sum interest rate. (Reinhart Boerner)
Final PBGC Reg Providing Allocation of Assets Table for 2008 Single-Employer Terminations (PDF)
Excerpt: "This rule amends the Pension Benefit Guaranty Corporation's regulation on Allocation of Assets in Single-Employer Plans by substituting a new table that applies to any plan being terminated either in a distress termination or involuntarily by the PBGC with a valuation date falling in 2008, and is used to determine expected retirement ages for plan participants. This table is needed in order to compute the value of early retirement benefits and, thus, the total value of benefits under the plan." (Pension Benefit Guaranty Corporation)
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