Earlier this year, the Department of Labor and the Treasury put out a Request for Information (RFI) on lifetime income options for retirement plans. Last week was the deadline, and they got some great responses. My favorite is from the American Academy of Actuaries. Not surprising, since I’m an actuary. But they pointed out something […]Read More… from Lifetime income from DC plans
Many small cities and governmental entities (less than 100 employees) are still figuring out their GASB 45 liability or whether they even have a liability. GASB’s Alternative Measurement Method (AMM) is a simplified alternative to performing a full actuarial valuation, but even the AMM has a cost that some very small entities would prefer to […]Read More… from An Alternative to the GASB 45 AMM
There’s a great article on funding OPEB liabilities by the MN State Auditor’s office. It’s written for counties, but it applies as well to cities, school districts and other government employers in Minnesota. Whether or not to pre-fund OPEB liabilities isn’t a no-brainer. It’s standard practice for public pensions, and it’s required for private pensions. […]Read More… from Pre-funding OPEB liabilities
A Congressional proposal has been introduced that would “severely reduce the attractiveness of cross-tested plans” according to the American Society of Pension Professionals & Actuaries. Cross-tested plans can be used to provide different defined contribution allocations to different groups of employees. Often cash balance plans are aggregated with a defined contribution plan and cross-tested for […]Read More… from Threat to Cross-Tested Plans
Under GASB 45 accounting rules, there are many technical terms. One of these is the Annual Required Contribution (ARC). I often get questions from clients regarding the “meaning” of the ARC, so I thought that I’d give a quick and simplified explanation. Background: GASB 45 rules create a method for public employers to accrue OPEB […]Read More… from GASB 45 – What’s the meaning of ARC?
Just ran across this, in Consumer Reports of all places. It’s about the new DB(k) plan, a 401(k)/defined benefit combo that came in as part of the Pension Protection Act of 2006 (PPA), first available in 2010. We’ve never thought the DB(k) would have much appeal, but what do we know? I thought cash balance […]Read More… from The new DB(k) plan
GASB 45 covers a variety of OPEB (Other Post Employment Benefits) such as retiree medical, dental, and vision benefits. Although retiree medical insurance gets most of the attention and generally has some of the largest liabilities, dental coverage has the potential to create a significant liability too. Just as with retiree medical benefits, retiree dental […]Read More… from GASB 45 Dental Benefits
Several states (Minnesota, Iowa, Indiana and Florida) have a “mandated” implicit rate subsidy. That means almost every public-sector employer in these states has an OPEB liability. Each of these states has a statute that says public employers: must allow retirees to stay in the health plan until age 65, and can’t charge them any more […]Read More… from State-mandated implicit rate subsidies
We’re on the last wave of compliance with GASB 45 accounting for other post-employment benefits (OPEB). The biggest calendar-year employers (Phase 1) started in 2007, midsize (Phase 2) in 2008. Now it’s 2009 audit season, when smaller employers (Phase 3) will shift from cash-basis OPEB accounting to GASB 45’s accrual basis: recognizing the cost over […]Read More… from GASB 45: the Last Wave
One little noticed PPA requirement is the multiemployer summary plan report. It’s due to participating unions and contributing employers within 30 days after 5500 due date (starting with the 2008 5500), so one should have been filed already for most multiemployer pension plans. The Department of Labor was required to publish a model form for […]Read More… from Multiemployer Defined Benefit Plan Summary Report
