AAA vs. ACOPA

Or that’s what participants on the ASPPA College of Pension Actuaries (ACOPA) message board dubs the announcement released today by the American Academy of Actuaries (AAA) “to change the composition of the Academy’s Selection Committee. This committee is established by the Academy Bylaws and appoints members of the Actuarial Standards Board (ASB) and the Actuarial Board for Counseling and Discipline (ABCD), both of which are housed within the Academy. Effective immediately, the Selection Committee will be composed only of the presidents and presidents-elect of the Academy, the Society of Actuaries, and the Casualty Actuarial Society” with no representatives from either ACOPA or the Conference of Consulting Actuaries (CCA).

The reason:

The Board concluded that those organizations’ missions diverge significantly from the others, particularly with respect to lobbying and advocacy. Every industry and segment of the profession has the right to advocate for its own interests. ACOPA seeks to “promote the expansion of the private retirement system,” while the CCA is active in “supporting the … career success of consulting actuaries.” These are honorable missions, but they are fundamentally different from the professionalism role played by the ABCD and ASB on behalf of the Academy.

Commercial considerations should definitely be eliminated from setting actuarial standards but I would note that most ACOPA members work on well funded private-sector single employer plans (even if primarily due to PPA and PBGC’s need for cash) while every public plan I have seen has been signed by an AAA member. Those public plans have funded ratios (if valued at PPA rates) of about 30% and have pioneered gimmicks like open amortization while standing idly by as politicians dictate their contribution numbers.

4 responses to this post.

  1. Posted by Tough Love on September 7, 2018 at 7:54 pm

    THIS part is the “take-away”…………..

    “Those public plans have funded ratios (if valued at PPA rates) of about 30% and have pioneered gimmicks like open amortization while standing idly by as politicians dictate their contribution numbers.”

    NOTE: US Treasury/IRS Regulations DO NOT ALLOW Private Sector Plans to grant further accruals if the Plan’s funding ratio drops below 60% (yes 60% !)

    ALL Public Sector DB Plans should be hard-frozen (ZERO future growth) for the Future service of all CURRENT workers …………….. to STOP digging the financial hole that these Plans are NOW in deeper every day …………. and FURTHER screwing Taxpayers called upon to pay for 80% to 90% of the total cost of their ludicrously excessive pensions.

    Reply

  2. Posted by PS Drone on September 7, 2018 at 8:13 pm

    None of the issues discussed in the attached apply to New Jersey:

    https://www.zerohedge.com/news/2018-09-07/pension-crisis-bigger-worlds-20-largest-economies

    Reply

    • Posted by Tough Love on September 8, 2018 at 6:53 am

      From the linked article ……………
      —————————————-
      In the US alone, federal, state, and local governments, pensions are about $7 TRILLION short of the funding they need to pay out all the benefits they’ve promised.

      Governments have lulled hundred of millions of people into a false sense of security based on financial promises they are not going to be able to keep.

      It’s not a political problem. It’s an arithmetic problem. And one they’re unable to solve.
      ————————————–

      I have no idea why you think ……. “None of the issues discussed in the attached apply to New Jersey” ………… clearly the poster-child of ludicrously excessive (and VERY materially underfunded) Public Sector pensions.

      Reply

  3. Posted by Eric on September 8, 2018 at 7:57 am

    Tough Love:
    Perhaps PS Drone is being facetious.
    Eric

    Reply

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