Description: The actuarial techniques actuaries use in financial security systems can be adapted to provide valuation of potential corporate environmental liabilities.

Description: Highlights a new research paper on determining discount rates for pension plans, by John Turner. The paper breaks new ground on deciding on the appropriate discount rate for untradeable benefit obligations, with a comprehensive summary of the field.

Description: The article makes reference to how the intervention by government agencies and institutions into the financial marketplace are creating distortions. This artificial tampering into market mechanisms will likely result in major financial dislocations down the road as natural economic forces (coined by the term "invisible hand") eventually are allowed to come into play.

Description: This article provides an overview of the different types of real world interest rate scenarios that practitioners use in the life insurance industry and explores different approaches to building those generators.

Description: The impact of bond default risk on retirement benefit obligations describes how the probability default on a bond is similar to the probability of death for an annuitant. Bonds are used to cash flow match retirement obligations cash flows to funding from bond. Just as the probability of non-payment happens on the liability side, we can do the same with selected bonds. The end result may be an adjustment to the discount rates used.

Description: This article presents a case study that examines the implication of using real-world interest rate scenario generators with a block of fixed deferred annuities. We contrast cash flow testing results based on New York 7 deterministic scenarios to stochastic scenarios generated with the Academy Interest Rate Generator , as well as an alternative economic scenario generator designed explicitly to capture the risk of a persistently low interest rate environment and the transition to a rising interest rate environment.

Description: Summarizes the articles in the newsletter.