Perspectives

Social Security is the foundation of retirement security for most people in the U.S. It is one of the very few sources of inflation protected income available to retirees. This article is intended to provide a general understanding of some common situations and help readers understand the financial issues facing Social Security. In this article, we cover: 1) background information related to Social Security; 2)

Typically, employers finance Other Post-Employment Benefits (OPEB) obligations through either: 1) a Pay-As-You-Go (PayGo) approach; or 2) prefunding through a dedicated trust. In this article, we compare these two approaches by highlighting their advantages and drawbacks, and comparing their financial impact through a practical case study. This article is intended to increase awareness in the advantages of prefunding OPEB benefits, while also balancing current budget priorities

In this article, we discuss increases in interest rates from historic lows, potential impacts on PERS’ portfolio expectations, and policy issues surrounding changing the assumed rate of return. This article offers public plan stakeholders some considerations about the potential impact of the interest rate increases on the assumed rate of investment return assumption used in actuarial valuations.  

Layered amortization is an actuarial tool that can be used by a retirement plan to help achieve two primary objectives of: 1) paying off the existing Unfunded Actuarial Accrued Liability (UAAL); and 2) stabilizing annual contributions. This article explores the layered amortization approach which may be utilized by a retirement plan to help meet its funding objectives in volatile times.  

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

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.