Archive for the ‘Actuarial Math’ Category

NJ Retirement System Hits $11B

nj1015.com put together a useful story from state pension data updated through March, 2018 putting names and faces to the $11 billion that it estimates is being paid out annually to retirees. However, there was no downloadable spreadsheet of the data so I put one together and also did some calculations for the retirees with the seven highest payouts. I agreed with 4 of the pensions while it looks like two should be getting more and one less.

Below are highlights from the story and my calculations.

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NJ Pension System Looking Better

No benefit cuts or contributions of the full ARC but New Jersey is about to report ‘good’ news on the funded status of their retirement system.

Lately when you went searching for New Jersey actuarial reports or other pension data you got this:
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As it turns out the New Jersey Division of Pensions & Benefits has revamped their website while releasing July 1, 2017 GASB 67 reports that look like they have typos in the headings:

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Actuaries Explaining DB/DC Difference

At yesterday’s hearing on the solvency of the multiemployer retirement system Representative Phil Roe posed to an actuary a basic question that many non-actuaries would have:

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That did not entirely explain why Defined Benefit plans got so severely underfunded. There is a real answer but most actuaries will not voice it:

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Actuary Watching NJ Politicians Like a Hawk

Not that it will penetrate thick skulls with other priorities, especially coming from a rookie legislator in the minority (and declining) party but Assemblyman (and pension actuary) Ned Thomson took a shot…with a bullseye on the interaction between a plan’s funded ratio and funding interest rate:
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EA18 (5) PBGC Reaction to ‘Segal Blend’ Rejection

In a challenge to the use of different factors for calculating withdrawal liability for multiemployer plans than are used for funding, the U.S. District Court for the Southern District of New York ruled last month:

[T]he fund’s “use of the Segal Blend rate when assessing the Times’ withdrawal liability was, in this instance, improper, and the Arbitrator’s finding to the contrary is reversed.” Third, the fund’s calculation of the Times’ second partial liability was ruled to be improper. Lastly, the court ruled the Arbitrator “correctly determined that the Times was entitled to interest on overpaid withdrawal liability, and [the Arbitrator’s] conclusion as to the applicable interest rate has not been rebutted.”

At today’s ‘Dialogue with the PBGC’ session the first audience question was on this ruling and how the five panelists, all from the PBGC, expected the PBGC to react.

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EA18 (3) The Count

The last time I counted was in 2011 when there 844 attendees with 82 from the federal government and 23 from state retirement systems.  This year…..

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EA18 (2) ASOP 51

The first general session at the 2018 Enrolled Actuaries meeting is:

SESSION 001 Talking Risk Marriott Ballroom Credits: EA Core 1.50, CPD 1.50 While all sponsors of a defined benefit plan have assumed some risk, the approach in measuring and managing that risk varies depending on the type of plan and nature of the plan sponsor. Panelists representing each area of pension practice (single-employer, multiemployer, and public plans) share best practices for communicating risk to plan sponsors, and explain how they plan to modify their practice in light of the new risk ASOP. Learn how their approaches are similar, their important differences, and how to up your game when talking risk.

That new risk Actuarial Standard of Practice is No. 51 which will be effective for any actuarial work product with a measurement date on or after November 1, 2018. There will be a regular session on it also:

604 – New Risk ASOP: The Actuarial Standards Board recently released Actuarial Standard of Practice (ASOP) No. 51, a new standard on the Assessment and Disclosure of Risk Associated with Measuring Pension Obligations and Determining Pension Plan Contributions. The panelists provide a more detailed discussion of the specifics of this new ASOP following the general session, Talking Risk.

I look forward to an explanation of this ASOP but, after a quick read…..
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