Public Plan Actuaries as the Disease

“The Society [of Actuaries] needs to stop treating its members as some disease that the public has to be protected from.”

Paul Angelo, Public Plan Actuary one hour ago at a session on the Public Pension Plans Blue Ribbon Panel at the Enrolled Actuaries meeting to applause

 

It wasn’t exactly Lindsay Lohan and Paris Hilton but when about 100 public plan actuaries gathered in a room listening to the recommendations of a panel from which they were mostly excluded it did get a little testy (if not ugly – my notes don’t do it justice but this session was taped*).

Mr. Angelo, prior to his quote above, mentioned that he and other public plan actuaries ‘begged’ to be on this Blue Ribbon panel when it was established last year by the Society of Actuaries (then headed by Tonya Manning who moderated this session in which Blue Ribbon Panel members Bob North and Bob Stein also participated) they were denied, as it was explained here, because the panel was convened since “nobody was standing up for participants” (presumably actuaries working on public plans wouldn’t be doing that).

Mr. Angelo also mentioned Andrew Biggs and  David Crane** being on the panel as undermining its credibility and the work product

Ms. Manning mentioned that she wanted the discussion to be civil, as opposed to some of the emails she got on the issue (no reference as to whose emails).

Mr. Angelo finished up with the comment that there was an “unreality to the recommendations” without the active participation of those who work in the field.

This may not be the last word at this meeting.

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* Not by me but officially by the conference unlike the Ethics sessions.  They also asked at both the Ethics and this Blue Ribbon session whether there were any members of the press in attendance.  No hands went up (I’m a blogger not press and they didn’t ask that).  I note that the press question was not asked at the End-of-year valuation methodology session I attended though I suspect none there too.

** I’m guessing that David Crane was the second name mentioned.  I’m certain Andrew Biggs was the first.

2 responses to this post.

  1. Posted by Tough Love on March 24, 2014 at 9:34 pm

    Paul Angelo was interviewed by the Blue Ribbon Panel so he at least had an opportunity to express his thoughts to the Panel. Personally, being an employee of Segal Consulting, I feel he might be too biased (employment-wise) for panel participation.

    And I find it highly objectionable that Mr. Angelo mentioned that Andrew Biggs participation on that panel undermined its credibility and work product. Personally, I’m quite impressed with Mr, Biggs thoughtful analysis and discussion of pension funding issues. And a GREAT source is the following Chartered Financial Analyst (CFA) sponsored Panel discussion held just last week:

    http://blogs.cfainstitute.org/investor/2014/03/11/the-us-public-pension-funding-crisis-online-forum/

    I walked away from that CFA Panel discussion feeling that were are now “stuck” …. stuck with such high promised benefit levels that those employed in the DB pension industry (a few of whom were on that CFA Panel) had little option other than to fight that the current high current liability discount rates were reasonable and appropriate … lest they would be out of work. Mr. Briggs analysis and focus on the need to address and account for “risk” via much lower discount rates seemed MUCH more persuasive.

    While I’m sure the Public Sector Unions and workers would NOT agree (since they like the current “Heads We Win, Tails the Taxpayers Lose structure), it would seem that an appropriate balance would be to reduce FUTURE Service “guaranteed” benefit levels to what current contribution levels could buy under a valuation using long term Treasury Bond Rates for discounting Plan liabilities and grant benefit “dividends” if and ONLY if investment returns (over a rolling say 5-years) exceeds that assumed discount rate.
    ——————————————————————————-
    And FYI, Tonya Harding s/b Tonya Manning (past Pres. of SOA)
    ———————————————————————————

    Reply

  2. Posted by Anonymous on March 27, 2014 at 12:03 pm

    Tonya Manning is far too classy to be confused with Tonya Harding. Why would John Bury only quote Paul Angelo when there were many unemotional people also expressing their views? For instance, Gene Kalwalski, Pres of Cheiron, endorsed the Blue Ribbon Panel’s report.

    Reply

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