Description: The euro, the single European currency, can significantly change the way the world does business and will have some important implications on the ability of the United States and its currency to dominate the world's political and financial system.

Description: Many retirement actuaries have experience developing, implementing, and monitoring Liability Driven Investing (LDI) strategies for plan sponsors. These strategies typically involve modifying a plan’s investment strategy to remove a significant portion of the investment and interest rate risk now or at some point in the future when specific triggers are met. The tactics often involve the use of fixed income assets to cash flow and/or duration match the liabilities. In the spirit of helping actuaries expand their roles in an evolving defined contribution world, this article explores the application of LDI and derisking strategies within defined contribution and individual retirement accounts. The economic theory behind this approach is called the lifecycle hypothesis, or lifecycle finance. The benefits of the lifecycle finance method are that it provides a safe approach to save for retirement and a secure source of floor income during retirement. Similar to pension plans, each individual has his or her own idiosyncratic needs, wants, and risks that should be considered. Actuaries are uniquely situated to help defined contribution plan sponsors, individuals, and even themselves implement the lifecycle finance approach by developing and distributing tools and methods that focus on income (rather than wealth), LDI strategies, and personalization.

Description: Falling equity markets and interest rates have devastated pension plans worldwide during the past several years. The Standard & Poor’s 500 companies enjoyed a collective pension surplus of $252 billion in 1999. Even after the 2003 market rally, they face a deficit of $179 billion in 2003 Bianco 2003. These events have spotlighted the weakness of current funding and investment practices for corporate defined benefit pension plans. This article presents a case for securing all accrued benefits through “Full Funding.”

Description: Suspension of 30-year Treasury auctions will have minimal impact on bond market structure in the near term, but over the mid- to long-term, consequences could be profound. This article discusses that impact the suspension of the 30-year treasury will have.

Description: Long-term guarantees place unanticipated burdens on companies because of the degree to which the environment can change. These risks are compounded when combined with estimation of policyholder behavior, especially when solid experience data is not available. When risks are properly reflected, long-term guarantees do not always provide value to the customer in excess of the manufacturing cost. The product development actuary is challenged to compare customer value to company cost and use that measurement to identify novel ways to design products to better serve customers.