Description: The purpose of this paper is to explore a methodology for choosing among techniques for managing contribution volatility in defined- benefit pension plans. A frequently used – and as often criticized – method for managing contribution volatility is to base actuarial cost on smoothed assets. Our goal in this paper is to develop a methodology for measuring and evaluating the quantitative impact of competing asset smoothing policies. We proceed by investigating a series of basic pension metrics, evaluating the characteristics of each using a simulated pension plan. We then use normalized and weighted combinations of these metrics to determine an optimal smoothing policy.

Description: Report on the proceedings of the 2010 Long Term Care Think Tank Session, whose goals were to discuss the major issues and challenges facing the LTC insurance industry, and to formulate action items and initiatives to help the industry move ahead. Focus was on understanding the needs & affordability capabilities of different market segments, the limited variety of product designs, shrinking distribution force, regulation and public policy, implications of the CLASS Act, and ideas for educating consumers and marketing products.

Description: Essay reforming healthcare where participants have a vested interest in reaching the best answer.

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: The purpose of this paper is to explore pension plan metrics— – measuring the behavior of a defined- benefit pension plan in an uncertain environment. Our goal is to measure and evaluate the quantitative impact of competing policy choices. We proceed by investigating some basic pension metrics, evaluating the characteristics of each using a simulated pension plan. We find that some typical metrics— – such as the mean and standard deviation— – are useful only in certain circumstances and that other less traditional measurements are sometimes better suited to evaluating policy choices.

Description: The purpose of this paper is to explore pension plan dynamics— – the behavior of a defined- benefit pension plan over time in an uncertain environment. We proceed by simulating the behavior of a model plan in a stochastically varying economic environment. While both the model and its environment are simplified, the model displays interesting behavior suggesting policy considerations that should be included in the design and funding of these plans.