- Overview
A review of the current methods and assumptions used by practicing pension actuaries would reveal that practitioners typically apply them differently to public and private sector defined benefit (DB) pension plans, particularly in the U.S. Specifically, the degree to which pension finance principles (financial economics applied to pension plans) have been applied by plan actuaries and other decision makers to public pension funds is considerably less than for private plans. The divergent treatments may be traced primarily to the differing nature of public and private plans, including factors such as the regulatory and accounting environment in which the plans operate, and the needs and priorities of their respective stakeholders.
In light of this current state of practice, the Society of Actuaries' Pension Section Council has issued this Call for Papers to explore public pension plan finance. The organizers of this Call for Papers are interested in papers that address various elements of public pension plan finance and/or the differences between public and private plans, their roots, and their implications. For more background on the issues, potential submitters should review Section III Resources & Background to review prior papers, conference presentations and other material related to this Call for Papers.
It is anticipated that the scope of the submitted papers will fall under one or more of the following broad topic categories: Liability Measurement; Funding Policy; Accounting Policy; Benefit Pricing and Design; Investments; Governance, Agency Cost and Moral Hazard. Papers may address any one of these topics exclusively or present a thesis that spans several or all of them.
Using the above topic categories as a guide, interested researchers may wish to consider the following issues and questions. The list has been developed to provide authors with representative issues and is not intended to be all–inclusive or restrict other issues that fall under the scope of this Call for Papers that authors may wish to pursue.
- What are the informational needs of employees, taxpayers, and lenders (the principals), pursuant to public pension plans?
- What are the informational needs of trustees, elected officials, investment officers and managers, plan administrators, and rating agencies (the agents), pursuant to public pension plans?
- What are the differences and commonalities in employment relationships between the private sector and the public sector?
- What is the role of DB pension plans as compensation?
- What is the role of DB pension plans in workforce management?
- What pension plan risks need to be identified, disclosed and/or managed? How do these risks impact plan sponsors and plan sponsor risk management?
- What are the differences, if any, between the benefit commitments made by private and public pension plan sponsors, and how those differences affect the decisions made in benefit, funding and investment policies? How might contractual guarantees affect the valuation of the benefit commitments made? How might the strength of the benefit commitment bear on decision–making, valuation, and other related matters?
- What are the implications, if any, on choices of actuarial funding assumptions and methods to recognize plan sponsor/employer longevity and taxing power?
- How do the time horizons of plan sponsors/employers affect the valuation of the benefit commitments they make?
- How do plan sponsor/employer goals for benefit, funding and investment policy decisions affect the choices of actuarial assumptions and methods?
- What would be the benefits or drawbacks of public pension plans reporting market–related financial information?
- Does market–related information bear on benefit, funding and investment policies, and if so, how?
- Should investment policies be used to develop benefit and funding policies, and if so, how?
- What differences exist between public and private accounting objectives: e.g. accountability versus financial valuation?
- What is the relationship of agency cost and moral hazard to the measurement and reporting of liabilities?
- How is agency cost and moral hazard impacted by funding, investment and benefit design and pricing policies?
- How does public pension plan finance address intergenerational equity?
- How does the existence of a Public Employee Retirement System (PERS), as a financial intermediary, provide a basis for valuing the benefit commitments it administers differently from or the same as direct commitments of the plan sponsor/employer?
- If changes were to be made to current reporting/liability calculation methodologies, what types of transition options should be considered and why?
- How should the measurement of liabilities be applied in the context of Other Post–Employment Benefit (OPEB) plans? (Note while the primary focus of the Call for Papers is on retirement income plans, abstracts/papers addressing OPEB plans will be considered.)
This list is not intended to be exhaustive and authors may wish to consider other issues that fall under the scope of this Call for Papers.
- General Content Guidelines
The organizers of this Call for Papers are seeking papers that represent a range of perspectives and disciplines. As such, the organizers are hoping to receive papers from a diverse group of professionals including academic researchers, practitioners, plan sponsors, actuaries, analysts and other interested parties.
While it is the intention that the resulting set of papers represents a spectrum of perspectives and views, the organizers are not interested in purely opinion papers. In other words, while opinion may be an aspect of submitted papers, the underlying basis of the papers should be supported by practical facts, observations or theoretical development.
Papers that present solutions and design alternatives with longer–term or innovative approaches, including solutions that perhaps would not be easily implemented without legislative changes and shifts in societal thinking, are also welcome and encouraged.
Authors may submit either original research or expository papers. The papers have no required minimum or maximum length.
- Resources & Background
The following link presents a number of papers, presentations and information that provide background material for this Call for Papers.
- Procedure for Submission of Abstracts
Please submit an abstract or outline of your proposed paper by October 15, 2008 to:
At a minimum, the abstract submission should include a brief description of the subject of the paper, a list of key items to be covered, and a brief biographical paragraph summarizing the author's experience, prior publications and presentations, and contact information.
- Procedure for Reviewing Abstracts
Submitted abstracts will be evaluated by a review group for their potential for presentation at an anticipated event in the spring of 2009.
Abstract submissions will be accepted, accepted subject to revision, or declined. The review group is scheduled to complete its evaluation of the abstracts/outlines by November 15, 2008.
- Submission of Papers
All papers must be based on accepted abstracts and submitted in a complete format no later than March 1, 2009.
The procedure for submission of papers includes the following specific guidelines:
- Submissions that have a copyright must be accompanied by written permission to reprint.
- Submissions should be made electronically to Sue Martz.
- Publication and Presentation
The review group, after receiving all abstracts, will determine if an event for presenting the papers is appropriate. Should this occur:
- It is anticipated that travel and lodging expenses for authors selected to present at the event will be reimbursed, up to certain limits.
- A final determination as to the number of papers invited to present will be made after all abstracts have been submitted and reviewed.
It is anticipated that all accepted papers will be published. The papers will appear in an on–line monograph and, where appropriate, in Society of Actuaries publications such as The Pension Forum. Accepted papers may also be submitted to the North American Actuarial Journal and other peer–reviewed journals for publication consideration, depending on the choice and preference of individual authors.
The Society of Actuaries prefers to publish all papers and to copyright all published papers without a previous copyright. In addition, excerpts or synopses of the papers may be published for promotional purposes. For special publishing and copyright situations, the Society of Actuaries will work with authors to accommodate any particular needs.
The Society of Actuaries reserves the right to reject or not publish any papers not meeting the criteria and standards set by the review group.
- Questions
Please direct questions regarding this CFP to:
- Steven Siegel, SOA Research Actuary
- ph: 847.706.3578
- f: 847.273.8578
- e–mail: ssiegel@soa.org
- or
- Andrew Peterson, SOA Staff Fellow–Retirement Systems
- ph: 847.706.3591
- f: 847.273.8591
- e–mail:apeterson@soa.org