| Comment | Response |
|---|---|
| Several commentators suggested changing “...should calculate...” to “...should consider calculating...” in first paragraph of section 3.11. | The reviewers disagree and made no change in response to this comment. |
| Several commentators provided alternative language for the variable annuity plan language in section 3.11. | The reviewers modified the guidance to read, “For purposes of this obligation measure, the actuary should consider reflecting the impact, if any, of investing plan assets in low-default-risk fixed income securities on the pattern of benefits expected to be paid in the future, such as in a variable annuity plan.” |
| One commentator felt the ASB should include an explanation about why and how including LDROM disclosure provides appropriate and useful information for the intended user for inclusion in all funding valuations. | The reviewers believe the guidance is appropriate and note the transmittal memorandum of the ASOP states, “...this additional disclosure provides a more complete assessment of a plan’s funded status and provides additional information regarding the security of benefits that members have earned as of the measurement date.” |
| One commentator stated it is not clear what “costs accrued” means in the context of section 3.11. | The reviewers agree and clarified the guidance in response to this comment. |
One commentator suggested modifying the language in the fourth paragraph of section 3.11 to state,
“When plan provisions create pension obligations that are difficult to appropriately measure using traditional valuation procedures, such as benefits affected by actual investment returns, movements in a market index, or other similar factors, the actuary should consider using alternative valuation procedures such as those described under section 3.5.3, including the use of alternative discount rates if indicated by such procedures, to calculate the low-default-risk obligation measure of those benefits earned or costs accrued as of the measurement date.” |
The reviewers disagree and made no change in response to this comment. The reviewers note modifications were made to the fifth paragraph as follows: “For purposes of this obligation measure, the actuary should consider reflecting the impact, if any, of investing plan assets in lowdefault-risk fixed income securities on the pattern of benefits expected to be paid in the future, such as in a variable annuity plan.” |
- Froogled By:
- Elias Makere, FSA, MAAA
- Last Froogled:
ASOP 4 | Commentary Section 3.11 | COMMENT ON SECTION 3.11
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