^ What we subscribe to.

We fully subscribe to the findings of the 2014 Blue Ribbon Panel of the Society of Actuaries and the 2012 statement of the Pension Committee of the American Academy of Actuaries.

They recommend that public pension plans funding must aim toward 100% funding level on a level dollar basis over a reasonable period of time.  To achieve this goal, they single out three acceptable methods for amortizing unfunded past service liabilities.  In this way, the costs of the pension plans will be borne by the current taxpayers rather than future ones.  The concept of funding toward an 80% or 90% target using a level percentage of future salary over 40 years was discarded as insufficient.

The Panel also recommends providing clients with the Market Value of Liabilities using market rates of investment.  Rating services estimate the market value of liabilities from other information in the actuarial report, but we eliminate their guess work.

Too many public pension plans are using unsupportable high discount rates based on past performance of assets.  We recommend more reasonably attainable returns on investment for future performance.