There has been a great deal of debate about and evolution of the appropriate assumptions, methods and investments used in the context of valuing, reporting and managing pension plans. The assumptions, methods and investment approaches vary depending on (1) purpose, (2) type of pension plan and (3) standards in effect at the time. While there is no doubt that standards will continue to change, there is value in documenting how assumptions, methods, investments and standards currently differ among pension plan types and purposes, and why.

With this in mind, the Society of Actuaries' Pension Section Research Committee is seeking researchers to document the current rules and standard-setting authorities for differing plan types and purposes.

The deliverable for this project is a report that uses as its conceptual framework the matrix of plan types and purposes shown below. While the information is too lengthy for just one matrix, it is envisioned that the report may be divided into sections with separate matrices filled out to summarize the pertinent information from a particular section of the report.

Primary questions that should be addressed in the report using the matrix as a conceptual framework include:

1. What is the current standard of practice and common practice? The core principles for setting assumptions and methods should be outlined, rather than just simply giving a reference to a standard.
2. What is the source of the standard and who is the standard-setting body or authority?
3. Is there a current active debate within the standard-setting body or within professional circles about the standard itself (also, is there any active debate as to who the authority is)?
4. Are there any significant deviations from a standard currently in use?
5. When comparing the cells in the matrix across a common purpose or type of plan, if differences occur in the standards and practice, what are the reasons commonly provided as to why they differ?

The following are considerations that should be incorporated into the development of the report:

• There may be other types of plans that do not fit into the five categories above, such as church plans and nonqualified pension plans. Such plans may be handled in the report with a brief, focused narrative description of their pertinent characteristics.
• For accounting descriptions, there may be references to standards (such as statutory, CAS, etc.) that do not fit easily into the conceptual framework of the matrix. In such situations, they may be handled with brief narrative descriptions in the report.
• The assumptions that are the focus of this request for proposals are interest rates/discount rates, expected return on assets, mortality and retirement and termination rates. The major emphasis is on the discount rate. The report should be developed in this context.
• While it is understood that investing is technically not a purpose, it has been included in the conceptual framework of the matrix because the asset mix and investment objectives tend to vary materially between some plan types. For purposes of the report, highlighting the differences in investing practices is what is desired.
• The report should note any standards that may be changing, the outlook for those changes and a link to the appropriate website address to track the standard.
• Ideally, practice in both the US and Canada should be included (compared/contrasted), to the extent feasible.

The audience for this research is expected to extend beyond actuaries. With this in mind, the report should be developed considering the following audiences: (1) actuaries and other retirement professionals, (2) standard setters and (3) legislative bodies.

To facilitate the evaluation of proposals, the following information should be submitted:

• Resumes of the authors, including any graduate student(s) expected to participate, indicating how their background, education, and experience bear on their qualifications to undertake the research. If more than one author is involved for each report, a single individual should be designated as the lead researcher and primary contact. The person submitting the proposal must be authorized to speak on behalf of all the authors as well as for the firm or institution on whose behalf the proposal is submitted.
• A description of the data to be used.
• A description the expected report and any supporting data, tools or other resources.
• Cost estimates for the research, including computer time, salaries, report preparation, research costs, etc. Such estimates can be in the form of hourly rates, but in such cases, time estimates should also be included. Any guarantees as to total cost should be given and will be considered in the evaluation of the proposal. While cost will be a factor in the evaluation of the proposal, it will not necessarily be the decisive factor.
• A schedule for completion of the research, identifying key dates or time frames for research completion and report submission.
• Other related factors that give evidence of a proposer's capabilities to perform the requested research should be detailed.

The SOA's Pension Section Research Committee is responsible for the selection of the proposal to be funded. Input from other knowledgeable individuals may also be sought, but the SOA's Pension Section Research Committee will make the final decision. The SOA's Research Actuary will provide staff actuarial support. A Project Oversight Group (POG) will be appointed to oversee the project upon selection of the proposal.

Any questions regarding this RFP should be directed to:

Steven Siegel, SOA Research Actuary
e-mail: ssiegel@soa.org
ph: 847.706.3578
f: 847.273.8578

If you intend to submit a proposal, please e-mail written notification by November 1, 2010 to:

Barbara Scott, SOA Research Administrator
e-mail:bscott@soa.org
f: 847.273.8592

Please e-mail a copy of the proposal to Barbara Scott at bscott@soa.org

Proposals must be received no later than November 15, 2010. It is anticipated that all authors who have submitted proposals will be informed of the status of their proposal no later than December 2010.

Note: Proposals are considered confidential and proprietary.

The SOA reserves the right to not award a contract for this research. Reasons for not awarding a contract could include, but are not limited to, a lack of acceptable proposals or a finding that insufficient funds are available. The SOA also reserves the right to redirect the project as is deemed advisable.

The SOA intends to copyright and publish the results of this research. The research will be considered work-for-hire and all rights thereto belong to the SOA. However, appropriate credit will be given to the researcher(s).