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Milliman on Mortality: Hope to Die

"The Milliman report criticizing assumptions used by Detroit's erstwhile actuaries Gabriel Roeder Smith & Company (GRS), whose reports showed Detroit's plans to be among the healthier public plans in the nation, kicked off with a scathing indictment of mortality assumptions used by GRS which Milliman characterizes as too 'optimistic'. You tell a layman that mortality assumptions are 'optimistic' and the assumption would be that people are living longer but in the perverted world of public pension funding an optimistic assumption (and they're all optimistic) is one that lowers costs and having retirees die sooner is good news."

The Long-Term Cost of Short-Term Thinking: Why Prefunding OPEB Liabilities Matters (PDF)

"Employers typically finance OPEB obligations through either: [1] a Pay-As-You-Go (PayGo) approach; or [2] prefunding through a dedicated trust. In this article, we will compare these two approaches by highlighting their advantages and drawbacks, and comparing their financial impact through a practical case study. This article is intended to increase awareness in the advantages of prefunding OPEB benefits, while also balancing current budget priorities with long-term fiscal sustainability."

SECURE 2.0: What Should Defined Benefit Plans Be Doing Now? (PDF)

"[A chart] outlines those key provisions that are effective now, along with related considerations, both for required changes and those optional provisions that may be offered to plan members."

Interest Rates Have Risen from Historic Lows; Does That Mean We Can Raise Our Assumed Rate of Return? (PDF)

"This article offers public plan stakeholders some considerations about the potential impact of these increases on the assumed rate of investment return assumption used in actuarial valuations. In addition to actuarial assumptions, plan stakeholders must consider other factors such as the stability of plan contributions and the plan's risk characteristics."

A Comprehensive Funding Policy: The Recommended Instrument for Navigating Public Plan Funding (PDF)

"A funding policy can help achieve and sustain the long-term financial health of a pension or OPEB plan, especially by offering stability and guidance to decision making in periods of extreme economic volatility. A funding policy should be consistently applied, but it should also allow for the possibility of revisions should the need arise. Establishing and adopting a funding policy is one aspect of good governance."

Changes to ASOP No. 4 Affect Public Plan Actuarial Valuations (PDF)

"The revised ASOP No. 4 is effective for any actuarial report that meets the following criteria: [1]The actuarial report is issued on or after February 15, 2023; and [2] The measurement date in the actuarial report is on or after February 15, 2023.... The purpose of this article is to highlight some of the changes included in the revised ASOP, as well as assisting public plan sponsors in considering how these changes may affect their public pension plans."

Priest Retirement Case Study: 'Plan of the Future' Ideas and Considerations (PDF)

"50 years is a long time to sponsor a plan without making changes along the way.... Recently, [the author and] the Archdiocese of Indianapolis ... looked at each and every benefit policy and discussed whether it still made sense in today's world. The culmination of the project was a formal retirement policy, new plan document and a communication program to alert all priests of the changes and the reasons behind them."

The Role of Actuarial Audits in Performing Due Diligence (PDF)

"This article discusses actuarial audits as a due diligence tool for plan trustees to help manage retirement plan risk. High quality actuarial work can do much to ensure the long-term financial strength of a retirement plan. Similarly, low quality actuarial work, when left undiscovered, can undermine a plan’s financial security in a relatively short time period."

Understanding Actuarial Assumptions (PDF)

"Performing an actuarial valuation is a complex process which involves extensive data requirements and various assumptions. In order to fund pension benefits, several projections about future events are developed based on 'actuarial assumptions.' ... Properly chosen assumptions can help stakeholders understand the plan's financial condition and can help to ensure future sustainability."

Understanding ASOP No. 51, the Assessment and Disclosure of Pension Plan Risk (PDF)

"The ASOP requires the actuary to identify risks that may reasonably be anticipated to significantly affect the pension plan's future financial condition.... In addition to identifying the risks, the actuary is required to assess the identified risks on the plan's future financial condition.... [ASOP 51] does not require the actuary to evaluate the ability or willingness of the plan sponsor or other contributing entity to make contributions to the plan when due."