STUMP » Articles » Public Pensions Watch: Tell the Actuaries What You Want To Know » 28 July 2014, 02:28

The Actuarial Standards Board set the actuarial standards of practice for the United States. They issue ASOPs (actuarial standards of practice) and they are requesting comments on practice surrounding public pensions:

This document contains a request for comments concerning the application of the Actuarial Standards of Practice (ASOPs) in regards to actuarial valuations and other analyses used for determining public pension and other postemployment plan funding and accounting (“public plan actuarial valuations”). Please review this letter and provide the ASB the benefit of your comments and suggestions. Each written response and each response sent by e-mail to the address below will be acknowledged, and all responses will receive appropriate consideration by the ASB.
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Request for Comments

The ASB intends to undertake a comprehensive review of the ASOPs as they pertain to public plan actuarial valuations. As it begins its review, the ASB would like to solicit the views of actuaries and others who are interested in the application of the ASOPs to public plan actuarial valuations. The ASB welcomes comments on any issues relevant to this matter, and would like to draw readers’ attention to the following questions in particular:

1. Public plan funding and associated actuarial valuations are less uniformly regulated than those of private sector pension plans. Actuaries may be asked by their principal to advise on funding levels. Is additional guidance needed, beyond that in the recently revised pension ASOPs, regarding appropriate public plan
actuarial valuation practice to assist actuaries in performing their work and advising their principal? Why or why not?

2. If yes to question 1, in what areas is additional guidance needed?

3. If yes to question 1, should that guidance take the form of a separate public plan actuarial valuation standard or be incorporated within the existing ASOPs? Why or why not?

4. In general, the ASOPs are principles based and not rules based. As a result, the ASOPs are generally not highly prescriptive. Should the ASOPs related to public plan actuarial valuations be more prescriptive? If so, in what areas?

5. The ASOPs have provided guidance that has been applicable to all areas of practice in the pension community (for example, private sector, multiemployer, public sector). If you believe that additional guidance is needed for public plan actuarial valuations, should any of that additional guidance also apply to non-public sector plans? Why or why not?

6. The current definition of an “intended user” of an actuarial communication is “any person who the actuary identifies as able to rely on the actuarial findings” (ASOP No. 41, Actuarial Communications, section 2.7). Should the ASOPs require the actuary for public pension plans to perform additional, significant work (which would be incorporated in the guidance provided in the ASOPs) that is not requested by the principal if that work provides useful information to individuals who are not intended users? Why or why not? If so, should this requirement be extended to all pension practice areas? Why or why not?

By the way, while this request for comments is targeted at actuaries, and specifically actuaries who work in the public pension space, but they do require responses to be signed.

I am willing to review other people’s responses to this request for comment before they send it to the ASB, and for those who want to remain anonymous, I may be convinced to make the comment under my own name (the first is a blanket offer (unless I get too many responses) and the second is a conditional offer. I will not necessarily agree with a lot of people. I may be able to find another person who does agree with you, though, and be willing to submit the comment on your behalf.)

The deadline for comments is November 15, 2014 (and if you want me to review…my deadline is October 15, 2014. I am holding my comments until then.)

My email address is marypat.campbell@gmail.com if you want to discuss this further.