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: I used the inspirational movie, Stand and Deliver, to describe the motivating high school mathematics teacher and leader, Jaime Escalente. Mr. Escalante believed that as long as you had the desire, you can accomplish wonderful things.

Description: Franklin, one of the Founding Fathers of the United States, devised a method to achieve "moral perfection." The author explains the method.

Description: How is actuarial career development related to human development? The author draws a parallel using the archetypes developed by Swiss psychiatrist Carl G Jung.

Description: The five words for ERM are transparency, discipline, alignment, adaptability and resilience. This article focuses on transparency, discipline and resilience.

Description: Updates on the efforts of the Academy’s health practice council. its work groups and task forces, to educate health care policymakers on issues including health care reform, Medicare, loss ratios, premium review, reinsurance, benefit and eligibility changes, exchanges, and risk based capital.

Description: The editorial features a quiz on how well actuaries know who they are as a profession, historically speaking.

Description: The February/March 2014 edition of The Actuary magazine—the Society of Actuaries’ flagship publication.

Description: Chairperson’s column discussing the recent activities of the SOA’s Reinsurance Section.