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The Enrolled Actuaries Report of the American Academy of Actuaries -- Fall 2005 Edition (PDF)

8 pages. Excerpt: The Enrolled Actuaries Report is a quarterly Academy newsletter that focuses on the concerns of pension actuaries. The EAR covers federal legislation and regulations that affect pension actuaries, the Academy's work to advance sound pension policy, and related topics.  MORE >>

American Academy of Actuaries Comments to the Life Actuarial (A) Task Force on Investment Guardrails for Pension Risk Transfer (PDF)

"[T]he current proposal would apply to all PRT business, regardless of the specific investment and risk management strategies employed by the issuing company. However, the ARCS noted in our discussions that evaluating the appropriateness of many of the elements of the proposal requires an integrated analysis of the liabilities, the supporting in force assets held on each valuation date, and the company's investment and asset/liability management (ALM) strategies."  MORE >>

American Academy of Actuaries Comment Letter to FASB on Valuation Guidance for Financial Reporting (PDF)

"On behalf of the American Academy of Actuaries (Academy) Financial Reporting Committee and the Actuarial Standards Board (ASB), we appreciate the opportunity to provide this joint comment on the FASB's consideration of whether there is a need for Valuation Guidance for Financial Reporting and how such a need might be filled."  MORE >>

American Academy of Actuaries Calls for Social Security Decisions (PDF)

1 page; press release. Excerpt: The American Academy of Actuaries today gave an actuarial analysis of the 2003 Social Security Trustees Report. Members of the Academy's Committee on Social Insurance reported that the viability of the system could be extended if decisions are soon made to reinforce the trust fund. But they warned that inaction could have severe consequences on the nation's safety net for retirees.

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American Academy of Actuaries Comments on Exposure Drafts of Proposed Revisions to ASOP Nos. 4, 27 and 35 (PDF)

19 pages. "The proposed revisions to ASOP Nos. 4, 27, and 35 may require substantial effort to implement.... We believe is better to fully reflect assumption changes when the actuary deems those changes appropriate, and consider use of an output smoothing mechanism if needed to manage cost or contribution levels.... [We] are concerned that actuaries may not notice all of the changes and suggest that a version that tracks all of the changes be posted for use by the US actuarial profession ... We support the change to the requirement of Section 4.1.2 of ASOP Nos. 27 and 35 regarding the rationale for actuarial assumptions selected by the actuary."  MORE >>

American Academy of Actuaries Letter to IRS on Improving Access to IRS Actuaries and Other Employee Benefits Personnel (PDF)

"The Pension Committee ... is concerned about the decision by the [IRS] that would limit the pension actuaries' potential to interact with IRS actuaries and other experienced employee benefits personnel.... We do not believe ... that the inability of pension actuaries to interact with appropriate IRS personnel will result in cost-effective outcomes. U.S. retirement systems are exceedingly complex, and the ability of pension actuaries and the IRS to exchange timely, useful information is vital to the smooth operation of the systems."  MORE >>

American Academy of Actuaries Comments on Proposed ASOP on Assessment and Disclosure of Risk Associated with Measuring Pension Obligations and Determining Pension Plan Contributions (PDF)

"Rather than prescribe a detailed risk assessment process, the ASOP should clarify that the actuary should be able to focus on a few representative risks. For such representative risks, possibly in combination, the actuary might illustrate the volatility of future contributions, and possible trends in plan solvency levels. Actuarial judgment (which includes the actuary's assessment of the Principal's needs) should be used to determine whether the risk assessment should be made by assuming these events occur at the valuation date or whether longer periods of time should be use."  MORE >>

American Academy of Actuaries Comment Letter to PBGC on Late Retirement Actuarial Equivalence (PDF)

"PBGC has taken a preliminary position that we believe runs counter to sound actuarial practice, and that will lead in some cases to inappropriately large retirement benefits.... PBGC is interpreting plan provisions governing actuarial equivalence in a manner that results in benefits that are not actuarially equivalent.... Plans that specify pre- and post-retirement mortality assumptions separately -- rather than implicitly using the same assumption for both -- are being singled out for an interpretation that was never intended, never followed in practice, and actuarially incorrect."  MORE >>

American Academy of Actuaries Comment Letter to Actuarial Standards Board on ASOPs Pertaining to Public Pension Plan Funding (PDF)

"[A]dditional guidance or disclosure requirements could provide support to actuaries who make appropriate comments or disclosures when the plan or plan sponsor actions may not be consistent with the actuaries' recommendations.... With the new GASB standards, the determination of an appropriate actuarially determined contribution has become of greater importance for public plans and some additional guidance could be helpful ... [To] maintain the consistency of standards applicable to all pension actuaries, any new guidance should not be limited to a sub category based solely on the nature of the plan sponsor."  MORE >>

Pension Committee of the American Academy of Actuaries Comment Letter to Actuarial Standards Board on Proposed Revision of ASOP No. 35 (PDF)

"The language [of Sections 2.6 and 2.7] regarding a Prescribed Method may be confusing to some actuaries.... Section 3.1 ... should state that an actuary is very often able to identify two or more reasonable assumptions... It is not clear why the language [of Section 3.5.1 and 3.5.2] was changed from 'the actuary should establish an appropriate balance between refined methodology and materiality' to 'the actuary should consider the balance between refined assumptions and materiality'... Section 4.4 ... should include a statement that the Principal is the party that determines what is confidential or what the actuary may disclose[.]"  MORE >>

American Academy of Actuaries Pension Committee Comment Letter to Actuarial Standards Board on the Exposure Draft of the Proposed ASOP on Modeling (PDF)

"The exposure draft defines 'model' broadly. Indeed, the last paragraph in the background section says: 'Actuaries generally agree that almost all actuarial work involves modeling of some type....' It is unclear why this ASOP is needed in situations involving straightforward calculations. For instance, in calculating a deterministic present value using a pension valuation system or even using pencil and paper, the actuary seems to be using a model, as defined. In situations such as these, the exposure draft does not seem to have any positive effect and might instead add cost and exposure to routine work. Therefore, we believe the definition of 'model' should be scaled back so that the ASOP only applies where it provides value."  MORE >>

American Academy of Actuaries Comment Letter to NAIC on Defining 'Actuarial Value' Under the ACA (PDF)

"'Actuarial value' measures the relative generosity of benefits covered by a health insurance plan. Under the ACA, a health insurance plan's actuarial value indicates the average share of medical spending that is paid by the plan, as opposed to being paid out of pocket by the consumer.... Catastrophic plans are not required to meet actuarial value targets, except that they must have actuarial values below those of the bronze tier (60 percent)."  MORE >>

American Academy of Actuaries Comment Letter to Actuarial Standards Board on its Discussion Draft, 'Assessment and Disclosure of Risk Associated with Pension Obligations, Plan Costs, and Plan Contributions' (PDF)

"[T]here is substantial uncertainty involved in most retirement plan calculations due to the broad array of assumptions that are made, almost none of which are certain to be borne out. Taking at least some steps to ensure that the users of an actuarial work product are aware of the uncertainty involved is certainly advisable. The key decision, however, is how much additional work can be required of actuaries in performing substantially all actuarial assignments."  MORE >>

Comments of American Academy of Actuaries on HHS' Research Brief Entitled 'Actuarial Value and Employer-Sponsored Insurance' (PDF)

"The American Academy of Actuaries' Health Practice Council appreciates the opportunity to provide comments on the recently released [HHS] research brief, 'Actuarial Value and Employer-Sponsored Insurance.' ... There are additional factors that should be considered when interpreting the results and formulating policies to regulate [actuarial value] calculations for [employer-sponsored insurance]:"  MORE >>

American Academy of Actuaries Comment Letter to SEC on Registration of Municipal Advisors (PDF)

"We request that public pension plans be excluded from the definition of 'investment strategies' and that enrolled actuaries and members of the five U.S.-based actuarial organizations that have adopted the actuarialCode of Professional Conduct (including the Academy) be excluded from the definition of 'municipal advisors' to the extent they are providing actuarial services that are governed by the Actuarial Standards of Practice and the Code of Professional Conduct."  MORE >>

American Academy of Actuaries' Response to NYT Article, 'Actuaries Scrutinized on Pensions' (PDF)

1 page. Excerpt: The American Academy of Actuaries, an association of 16,000 U.S. actuaries, recognizes the importance of the issues raised by Mary Williams Walsh in her May 21 article, 'Actuaries Scrutinized on Pensions.'  MORE >>

American Academy of Actuaries Affirms Concerns Set Forth by Actuaries in Official Report of Medicare's Financial Condition (PDF)

"Because Medicare plays a critically important role in ensuring that older and certain disabled Americans have access to health care, the American Academy of Actuaries' Medicare Steering Committee urges action to restore the long-term solvency and financial sustainability of the program. The sooner such corrective measures are enacted, the more flexible the approach and the more gradual the implementation can be. Failure to act now will necessitate far more drastic actions later."  MORE >>

American Academy of Actuaries Statement on Supreme Court ACA Ruling

"The American Academy of Actuaries today called the U.S. Supreme Court's ruling to keep the Affordable Care Act largely intact a step toward ensuring that health insurance markets attract a broad cross section of risk, a cornerstone to any viable health insurance market. 'Given the provisions in the law that prohibit insurers from denying coverage or charging higher premiums to people in poor health, the individual mandate can now be an important component of the law to help reduce adverse selection,' said Academy Senior Health Fellow Cori Uccello."  MORE >>

Notes from Meeting of American Academy of Actuaries Multiemployer Committee with Agencies to Discuss MPRA Application Process (PDF)

8 pages. Topics include: [1] Investment return assumptions; [2] Mortality assumptions; [3] New entrant assumptions; [4] Impact of COVID pandemic on actuarial assumptions; [5] Applicability of Actuarial Standards of Practice; and [6] Partition design.

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American Academy of Actuaries Comment Letter to CMS on Actuarial Value Calculator (PDF)

"[T]he 2021 AV Calculator did not maintain the same relationships among metal levels that existed in prior years.... It is important that a single standard population be used for all metal levels ... in particular to ensure morbidity differences are not reflected across the metal levels' AVs. It appears that CMS is reflecting morbidity differences in the continuance tables, or otherwise using inconsistent populations for the determination of actuarial values across different metal tiers."  MORE >>