Froogle | ASOP 4 | Section 3.23

If the scope of the actuary’s assignment includes an analysis of the potential range of future pension obligations, periodic costs, actuarially determined contributions, or funded status, the actuary should take into account sources of volatility that, in the actuary’s professional judgment, are significant. Examples of potential sources of volatility include the following:

a. plan experience differing from that anticipated by the economic or demographic assumptions, as well as the effect of new entrants;

b. changes in economic or demographic assumptions;

c. the effect of discontinuities in applicable law or accounting standards, such as full funding limitations, the end of amortization periods, or liability recognition triggers;

d. the delayed effect of smoothing techniques, such as the pending recognition of prior experience losses; and

e. patterns of rising or falling periodic cost expected when using a particular actuarial cost method for the plan population.

When analyzing potential variations in economic and demographic experience or assumptions, the actuary should refer to ASOP No. 51 for additional guidance, where applicable.

user comments

thank you, come again!
Froogle 1.1.1.7

ASOP 4 | §3.23 | VOLATILITY

You Might Also Like