Actuarial Funding Policies and Practices for Public Pension Plans: What’s Behind the White Paper?

April 13, 2016
2:00 - 6:00 PM
Marriott Wardman Park Hotel
Washington, DC

 

Sessions:

Session Handout

Actuarial Funding Policies and Practices for Public Pension Plans: What’s Behind the White Paper? April 13, 2016 2:00 PM - 6:00 PM

The CCA PPC White Paper on Actuarial Funding Policies and Practices for Public Pension Plans was published in October 2014 following two plus years of frequent and exhaustive discussions by a dedicated group of public pension valuation actuaries, including leading actuaries from each of the major actuarial firms serving the public sector. This resulted in the industry’s most thorough and detailed development and discussion of a Level Cost Allocation Model (LCAM) for public pension plans.

Speakers at this seminar go beyond reviewing the basic findings and recommendations of the White Paper and dig into the science behind the development of the LCAM. For example, what is the “replacement life” entry age method and why is it sometimes “model” and other times “non-recommended?" What are the practical policy implications of using a “market value corridor” with asset smoothing, and how did the White Paper find corridors as wide as 50% to be model practice? What conflicting policy objectives led to the range of model periods for UAAL amortization? How did the LCAM get to its nuanced treatment of rolling amortization?

As part of this discussion, speakers at this seminar specifically review issues that were controversial in the White Paper development, including the use of the “ultimate” version of the entry age cost method and the use of rolling amortization to fund the UAAL. Panelists review the differing viewpoints and evolving arguments that ultimately led to the findings presented in the White Paper.

The seminar panel members were each actively involved in the LCAM development, including the resolution of the more controversial discussion topics. Attendees should have a deeper understanding of both the White Paper process and the LCAM mechanics, along with a better sense of why the White Paper and the LCAM truly represent an industry consensus of model practice for public pension funding policies.

Session Category
Public Plans
Credits
EA Core4.40
CPD4.40

  • 1 Paul Angelo Segal Consulting
  • 2 Thomas B. Lowman Bolton Partners, Inc.
  • 3 William R. Hallmark Cheiron, Inc.
  • 4 Brian B. Murphy Gabriel, Roeder, Smith & Company