Description: This paper discusses whether the use of relatively risk-free discount rates are appropriate under assumptions of substantial continuation of plan design and greatly increasing per capita payments, when the plan sponsor can dramatically change future cash flows. From Current Pension Actuarial Practice in Light of Financial Economics Symposium, M-RS04-1.

Description: The adoption of FAS 158 forces sponsors of post-employment health benefit plans to consider how to manage the volatility that changes in medical care inflation create in the other postemployment benefits (OPEB) liability. By choosing carefully how the nominal discount rate used for the liability is decomposed into real rates and inflation, I illustrate that the true exposure to an OPEB plan is to the spread of medical care inflation above (or below) the overall inflation rate. The implication is that an effective immunization strategy exists that can eliminate most of the volatility in the OPEB account.

Description: This article provides an overview of the laws and regulations governing pension funding and suggests analysis which will enable the plan sponsor to capitalize on contribution options and coordinate long and short term funding strategies.

Description: Feature article discussing the creation and effects of orphaned VEBAs, Voluntary Employee Benefit Associations.

Description: This article reviews the new standard of practice, ASOP 6, and its impact on the actuarial assumptions that actuaries use for valuations of retiree group medical and life benefits.

Description: SOA’s recently completed research project related to long term projects of health care cost trends for use in post retirement medical valuations.

Description: Exploration of sources of volatility in retiree health valuations, noting how volatility arises and might be mitigated, with discussion of valuation parameters more problematic for retiree health benefits than for pensions. Three significant influences on retiree health valuation volatility are covered-- changes in benefit level, fluctuations in cost level, and alterations in eligibility for, or duration of, benefit – and attention focused on the last two. Specific conclusions result in recommendations, which are supported by practical examples contrasting volatile measurement results with those likely from the recommended practices. Theoretical discussion includes health claim variation, health trend usage, financial economics, option pricing, discount rates, and deterministic vs. stochastic modeling.

Description: This survey was conducted by the Society of Actuaries to uncover how the continuing rise in healthcare costs is affecting consumers’ retirement planning, particularly for pre-retirees ages 50-64. This fact sheet presents key findings.

Description: Overview of research project to investigate the extent of funding of public government retiree health programs.

Description: This article provides a guide to setting discount rates. Guidance within FAS 106 and FAS 87 is reviewed in light of evolving practice and business climate.