EA18 (4) Risk in NYC

This year’s Enrolled Actuaries meeting is a bit faster paced as breakout sessions have gone from 90 minutes to a bite-sized 75 minutes and there are now 10 of them instead of 8. In that spirit these blogs will be shorter and more frequent.

We kick with my notes (my comments in brackets) on what Sherry S. Chan, New York City Chief Actuary, said at the first general session ‘Talking Risk’.

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…..

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…..

Alternative Dispute in NJ

The headline from the latest meeting of the New Jersey State Investment Council was:

New Jersey halts hedge fund, private equity investments, awaits direction from governor

with nj.com reporting:

The majority of New Jersey’s assets are considered return-seeking, a category that includes public equity, private equity and real estate. The state’s investment strategy has been a source of disagreement among the state’s investment overseers, as labor leaders pushed to slash its investments in alternatives, and hedge funds specifically.

Murphy has vowed to divest from hedge funds and private equity, though he’s not yet taken any formal steps.

“This analysis basically buttressed and endorsed the allocation that we’ve had all along,” said Tom Byrne, chairman of the State Investment Council.

But when the hard copy of my Pensions & Investment came in the mail today a bigger issue emerged that I would have expected to get a mention in other outlets supposedly covering the New Jersey pensions crisis.

EAM18 (1) : Interesting Charts

Next week I will be at the 2018 Enrolled Actuaries meeting and in going over the handouts to decide which sessions to attend I came across a few charts on multiemployer and public plans that I am fairly sure are public information and can be shared. Though meeting policies preclude any session recording I will report back occasionally throughout the week on any developments to extent I am allowed.

PBGC Primer

In FY2017, the Pension Benefit Guaranty Corporation (PBGC) insured about 24,000 DB pension plans covering approximately 40 million people. PBGC became the trustee of 82 newly terminated single-employer pension plans and began providing financial assistance to an additional 7 multiemployer pension plans. PBGC paid benefits to nearly 840,000 participants in 4,845 single-employer pension plans and more than 63,000 participants in 72 multiemployer plans.

All this according to PBGC: A Primer. More excerpts:

Can Unions Trust Murphy?

The Police and Firefighters’ unions in New Jersey are fully expecting to be able to run their own pension plan after the legislature overwhelmingly approved the transfer. But will Governor Phil Murphy keep his promise to sign that bill?

Eddie Donnelly, President of the NJ Firefighters Mutual Benevolent Association, discussed just that: