Slides from a session at the Investment Symposium held on April 11-12, 2011, in New York, NY. A discussion of the impact low interest rates have on the reported level of pension funding. Discussion of alternative methods of reporting on funding levels using a computation of the IRR needed to match PV of assets with PV of liabilities and then comparing that IRR to available returns. The implications for retirement funding and levels of pension benefits and retirement ages is discussed. Discussion of alternative investment policies and strategies for retirement savings plans, both defined benefit plans and individual savings for retirement plans.. Strategies to balance/evaluate surplus volatility in the face of capital market challenges. Evolution in Liability Driven Investing and risk concepts.

The authors suggest the use of a Custom Liability Index as a solution to the pension crisis of significantly underfunded private and public defined benefit plans. From the Investment Symposium, Session R2, March 2012.

Slides from a presentation at the Society of Actuaries 2007 Annual Meeting, held in October, 2007 in Washington, D.C.Presents - Financial Economics and Public Funds Discussion of a variety of subjects relating to public sector pension plans, including: 1. disconnect between financial economics and methods for valuing pension assets and liabilities, which masks the true risks including volatility and adequacy of funding levels and 2. Loss of trust in the actuarial profession if promises to public sector plan participants can't be met long term with current levels of funding, 3. Intergenerational transfer of risk/costs given the methodologies

This presentation explores management options for the pension risks associated with defined benefit plan terminations. Settlement/exit options, funding options and investment options are covered. Three cases studies are reviewed as well as the alternative considerations for an interactive case study are presented. From the SOA Annual Meeting, Session 118 OF, October 2011.

The authors suggest the use of a Custom Liability Index as a solution to the pension crisis of significantly underfunded private and public defined benefit plans. From the Investment Symposium, Session R2, March 2012.

This web page contains links to papers that address the funding of defined benefit pension plans. In general, the papers seek to find solutions for a sound funding policy in light of the many, and often contradictory, actuarial assumptions and methods promulgated by different governing agencies, such as the IRS, PBGC, and FASB, for different purposes. Papers regarding the funding of Canadian pension plans and public sector pension plans are also included.

This article discusses Life-Cycle Saving and Investing for retirement. The article reviews how actuaries can add to the discussion of what is wanted and needed in retirement and how traditional replacement ratios can be linked with consumption targets.

2009 Investment Symposium, New York. This session explored Liability-Driven Investing for pension plans. Topics covered: 1. Maintaining return while reducing risk. 2. Customizing LDI. 3. Understanding liability credit risk. 4. Managing liability credit risk. 5. Products that can be used in LDI. 6, Key steps in using derivatives. 7. Criteria for evaluating products.

Increasing longevity, declining birth rates, and high unemployment severely threaten the financial basis of many public pension plans. The resulting financing gaps can be seen as implicit public debts which often exceed the value of GDP figures and are in many cases higher than the explicit public debt.

New approaches are needed to value benefit plans subject to unilateral changes or termination. The paper focuses on postretirement health benefits, but the thesis may be relevant to any flow not guaranteed by law or accumulating funds. This paper provides a basis for discussion of assumptions that are appropriate when the plan sponsor can unilaterally and dramatically change future cash flows. The paper discusses how actuaries might best approach measurement situations where further plan reductions, or outright terminations, are to be anticipated. It introduces refinements and briefly discusses how each would fit with the usual actuarial model and how differences might affect behavior. These ideas are related to financial economics and the Bader-Gold paper Reinventing Pension Actuarial Science. Before concluding, the wider topic of discount rate selection is briefly addressed.