A funding policy for a public sector defined benefit pension or OPEB plan is a systematic set of rules and procedures used to determine the annual funding contribution requirements to be made by the employer(s) in a specific year or a series of years. Establishing and reviewing a comprehensive funding policy will help govern decision making that will lead to better financial outcomes and improved benefit security for all members of a public sector pension or OPEB plan.
The Actuarial Standards Board (ASB) adopted a revision to Actuarial Standard of Practice (ASOP) No. 4, Measuring Pension Obligations and Determining Pension Plan Costs or Contributions. The revised ASOP will be applicable to actuarial valuations performed beginning in the spring of 2023.
This article highlights some of the revisions to ASOP No. 4 and its implications for public pension plans.
The Social Security program is becoming increasingly important. This article includes: 1) background information; 2) retirement benefit calculations; 3) the Windfall Elimination Provision (WEP); 4) early and late retirement benefits; 5) working after retirement; 6) family benefits; 7) the Government Pension Offset (GPO); and 8) cost-of-living increases.
Understanding changes in the benefits landscape in the last 50 years can help Dioceses update 1970’s-era benefit policies and better prepare priests for retirement. This article provides a comparison of priest retirement benefits as they appear today versus when they were initially developed in the 1970s. The article concludes with an overview of the “Plan for the Future.”
Retirement plan trustees are tasked with retirement plan administration. Trustees are responsible for hiring service providers and monitoring the quality of their work. This article discusses actuarial audits as a due diligence tool for public plan trustees.
Internal Revenue Code (IRC) Section 415(b) places limits on amounts that may be paid from defined benefit (DB) retirement plans that are “qualified” under Code §401(a). This article summarizes the key §415(b) provisions for governmental DB plans and discusses compliance with §415(b) and the associated regulations.
A critical first step in understanding retirement benefit adequacy is collecting individual data from priests by conducting a pension plan survey. Since 2011, GRS has deployed a pension plan survey to priests in 15 dioceses. The survey has been proven to be an important tool to help the dioceses understand their priests’ retirement readiness.
Performing an actuarial valuation for a defined benefit retirement plan is a complex process which involves extensive data requirements and various assumptions. In order to fund pension benefits, several projections about future events are developed based on “actuarial assumptions.” The assumptions should be carefully chosen and continually monitored since they can have a dramatic effect on the results of the valuation and plan funding.
The Actuarial Standards Board (ASB) adopted a new Actuarial Standard of Practice (ASOP) No. 51, Assessment and Disclosure of Risk Associated with Measuring Pension Obligations and Determining Pension Plan Contributions. This article provides a high-level overview of ASOP No. 51 and its implications for public pension plans, which is effective for actuarial work products with a measurement date on or after November 1, 2018.
For most public sector retirement systems, funded statuses have declined and their contribution requirements have increased over the past decade. These trends have prompted various levels of pension reform. A “top-down” approach has proven to be effective that first determines an overall structure and magnitude of change, including development of a contribution strategy, and then details the specific design modifications to achieve those objectives.