Description: This paper establishes a framework to analyze the volatility of corporate profits as a result of variability in accounting for pension plans. It models a Canadian corporation that maintains a defined-benefit pension plan and that has adequate cash flow to fully fund the pension plan, should it wish. Volatility of corporate profits is important because many senior executives have some component of their compensation directly related to corporate profitability and consequently do not want any surprises with respect to actual profits compared to expected profits. The volatility management techniques considered are investment policies for the pension plan, funding the pension plan, and an alternative plan design. The analysis is timely since changes are proposed to the accounting standards to eliminate most smoothing techniques. The results suggest that, depending on the investment environment, reduced volatility may be accompanied by by enhanced return, which is a result that few would expect.

Description: This paper suggests a possible framework for the mandatory annuitization of U.S. retirement savings, considers the experience of other countries and analyzes the advantages and disadvantages of mandatory annuitization.

Description: Part 5 addresses various purposes for measuring a public sector pension liability and which measures have the most practical usefulness.

Description: A labor union negotiator comments on the papers being presented at this symposium. From The Future of Pension Plan Funding and Disclosure Monograph, M-RS05-1.

Description: This paper presents a multi-state stochastic model for analyzing continuing care retirement community CCRC populations. The model considers CCRCs with a number of independent living units and a skilled nursing facility. Residents may transfer temporarily or permanently to this facility. It is assumed that units vacated by deaths, withdrawals or permanent transfers are immediately occupied by new residents. Transfers are modeled using a time-homogeneous Markov process. The paper provides some probabilistic results and some numerical results obtained using this model. Some important generalizations of the model are also briefly discussed.

Description: Part 4 presents an alternate approach to obtaining the fair value of the public sector employer’s pension benefit liability.

Description: Paper offers a model retirement plan that addresses the needs of retirees, financial institutions, and intermediaries.

Description: 'This paper takes a fresh look at the historical record of the most popular financial planning device retirees encounter, the 4% rule.' From the 2011 Enterprise Risk Management Symposium, March 2011.

Description: This paper discusses the level of reserve funds that a pension plan should maintain to protect itself from a downturn in the financial markets. From Current Pension Actuarial Practice in Light of Financial Economics Symposium, M-RS04-1.

Description: The author incorporates inflation-indexed bonds into the retiree asset allocation problem and illustrates how Liability Driven Investing LDI can be applied to individual investors. From the 2011 Enterprise Risk Management Symposium, March 2011.