Research Projects
Research Studies–Data Requests
Call for Papers–Improving the Predictability of Defined–Benefit Plan Costs for
Canadian Pension Plan Sponsors
- Overview
Many commentators question the future prospects of defined benefit (DB) pension plans. Plan
sponsors are apprehensive of the financial risks associated with DB plans, yet are unwilling to adopt risk
mitigation approaches due to the possibility of higher long–term costs. Early– and mid–career
employees find DB plans hard to understand, and often ascribe a low value to such plans as a result. Legislators
and regulators continue to impose rules that make DB plans more difficult and costly to administer – or,
in Australia's case, have even adopted legislation to actively drive plan sponsors toward a defined contribution
approach. And, the courts continue to issue rulings that impose asymmetrical risks upon plan sponsors and
members.
In the current environment – and for the foreseeable future – why should plan
sponsors continue to support a DB approach?
Yet, the DB concept arguably embodies sound principles of risk sharing and risk mitigation.
In theory, no other approach for delivering retirement income is as efficient in managing longevity risk –
one of the principal uncertainties individuals face when planning for their financial needs during retirement.
Although there is a general consensus that the pooling of mortality risks is sound and desirable in the context
of life insurance (to manage the risk of premature death), there appear to be few outspoken advocates for the
pooling of mortality risks in the context of retirement savings (to manage the risk of living too long and
exhausting one’s savings).
Focusing on the Canadian pension environment, are DB plans indeed fundamentally flawed? Or,
is it simply time to go back to the drawing board and “reinvent” them?
In particular, given that the sponsorship of DB plans in Canada is voluntary:
- How might DB plans be reinvented to address the current concerns of plan sponsors?
- How could the financial risks be reduced in a manner palatable to plan sponsors?
- How could the costs be made more certain?
- Are new plan designs required?
- New funding strategies?
- New perspectives on investment policy?
- Different approaches to articulating the “deal” between plan sponsors and
members?
- New mechanisms and financial products for passing risk to other parties?
- What solutions could be proposed – focusing first on ideas that are feasible under
the current regulatory framework, and can be implemented in the immediate future.
- Content
To expand the thinking on this fundamental question, the Society of Actuaries Pension Section
Research Committee and the Canadian Institute of Actuaries are issuing this Call For Papers, inviting plan
sponsors, pension consultants, plan members and representatives, academic researchers and other interested
parties to develop proposals for how Canadian DB plans could be reinvented to address (in particular) plan
sponsors’ concerns regarding cost predictability and volatility.
In proposing solutions, we are seeking papers that consider:
- The perspectives of, and impact on, various stakeholders in the pension system;
- Solutions that would be feasible within the current regulatory framework in Canada, and
that plan sponsors could take action on in the immediate future;
- Where appropriate to the paper’s content, how the solutions might be extended to
other countries, both in North America and abroad.
We will also consider papers that present solutions that would require fundamental changes to
pension legislation.
Authors may submit either original research or expository papers. The papers have no
required minimum or maximum length.
- Procedure for Submission of Abstracts
Submit electronically an abstract or outline for your proposed paper by November 30, 2006 to:
Jeanne Nallon
ph: 847.706.3592
f: 847.273.8592
At a minimum, the submission should include a brief description of the subject of the paper,
a list of key items to be covered and a biographical paragraph containing the author’s experience, prior
publications, presentations, and contact information.
- Procedure for Reviewing Abstracts
Submitted abstracts will be evaluated by a review group for their potential for presentation
at a symposium or seminar, and/or publication in a monograph. The earliest date for such a symposium or seminar
will be April 2007.
Abstract submissions will be accepted, accepted subject to revision, or declined. The review
group is scheduled to complete its evaluation of the abstracts/outlines by December 15, 2006
- Submission of Papers
All papers, based on accepted abstracts, must be completed and submitted no later than
March 23, 2007.
The procedure for submission of papers includes the following specific guidelines:
- Submissions that have a copyright must be accompanied by written permission to reprint.
- Submissions should be made electronically to Jeanne Nall
- Publication and Presentation
The review group will determine if a symposium or seminar for presenting the papers is
appropriate. Should this occur:
- It is anticipated that travel and lodging expenses for authors selected to present at the
symposium will be reimbursed, up to certain limits.
- A final determination as to the number of papers invited to present will be made after all
abstracts have been submitted and reviewed.
Since the papers to be submitted will be focused on Canadian solutions, the symposium or
seminar will likely take place in Canada.
It is anticipated that all accepted papers will be published. The papers will appear in an
on–line monograph and, where appropriate, in Society of Actuaries publications such as The Pension Forum.
Upon author request, accepted papers may also be submitted to the North American Actuarial Journal (NAAJ) for
publication consideration. Authors can submit their papers to other publications provided that the Society of
Actuaries and the Canadian Institute of Actuaries can maintain the right to publish the papers.
The Society of Actuaries and Canadian Institute of Actuaries reserve the right to publish all
papers and to copyright all published papers without a previous copyright. In addition, excerpts or synopses of
the papers may be published for promotional purposes. The Society of Actuaries and the Canadian Institute of
Actuaries reserve the right to reject or not publish any papers not meeting the criteria and standards of the
review group.
- Questions
Steven Siegel, SOA Research Actuary
Society of Actuaries
475 N. Martingale Road, Suite 600
Schaumburg, IL 60173–2226
ph: 847.706.3578
f: 847.273.8578
Procedure for submission of abstracts:
Please fax or electronically submit an abstract or outline for your proposed papers by
November 30, 2007 to:
Jeanne Nallon
ph: 847.706.3592
f: 847.273.8592