Description: Part 2 proposes solutions to the second of three flaws of the current financial model to obtaining the fair value of the public sector employer’s pension benefit liability.

Description: The current financial model put forth as the market value of public sector pension benefit liabilities is simply the expected cash flows of the accumulated benefit obligation, as defined for current private sector financial reporting, discounted using a risk-free yield curve. This model is in serious need of an overhaul. This monograph addresses this issue.

Description: A common approach to estimating the total amount of savings required to fund retirement is to first apply a generic “replacement rate” to pre-retirement income, such as 80%, to get the desired retirement income need. That need is then assumed to increase annually at the rate of inflation for the duration of retirement, which is generally assumed to be some fixed period, such as 30 years. Using government data along with a fairly simple market and mortality model, we explore these assumptions to more accurately estimate the true cost of retirement

Description: Part 3 proposes solutions to the third of three flaws of the current financial model to obtaining the fair value of the public sector employer’s pension benefit liability.

Description: Part 1 proposes solutions to the first of three flaws of the current financial model to obtaining the fair value of the public sector employer’s pension benefit liability.

Description: This paper presents a history of traditional topics like actuarial cost methods and assumptions, the history of past inquiries into the dynamic and stochastic nature of pension costs, and the perceptions and concerns of pension actuaries of the past. From The Future of Pension Plan Funding and Disclosure Monograph, M-RS05-1.

Description: Introduction to the paper that documents the flaws of the current financial model.

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

Description: Six appendices are presented: Study Methodology and Response, Column Names and Data Codes, Listing of Respondents and Reports Received, Experience Study Data, Valuation Report Data, and Investment Data. From A Study of Public Employees Retirement Systems, M-RS96-1.

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