Moderator: Andrew J. Peterson, FSA, EA, FCA, MAAA

Transcription

1 Session Pension Section Hot Breakfast; Sound Bites on SOA Retirement Research & Pension Section Activities Moderator: Andrew J. Peterson, FSA, EA, FCA, MAAA Presenters: Andrew J. Peterson, FSA, EA, FCA, MAAA Anna M. Rappaport, FSA, MAAA Lisa A. Schilling, FSA, EA, FCA, MAAA SOA Antitrust Compliance Guidelines SOA Presentation Disclaimer

2 2017 SOA Annual Meeting & Exhibit PRESENTERS: ANNA RAPPAPORT, FSA, MAAA LISA SCHILLING, FSA, EA, FCA, MAAA ANDREW J. PETERSON, FSA, EA, FCA, MAAA Pension Section Hot Breakfast: Sound Bites on SOA Retirement Research & Pension Section Activities October 18, 2017

3 SOCIETY OF ACTUARIES Antitrust Compliance Guidelines Active participation in the Society of Actuaries is an important aspect of membership. While the positive contributions of professional societies and associations are well-recognized and encouraged, association activities are vulnerable to close antitrust scrutiny. By their very nature, associations bring together industry competitors and other market participants. The United States antitrust laws aim to protect consumers by preserving the free economy and prohibiting anti-competitive business practices; they promote competition. There are both state and federal antitrust laws, although state antitrust laws closely follow federal law. The Sherman Act, is the primary U.S. antitrust law pertaining to association activities. The Sherman Act prohibits every contract, combination or conspiracy that places an unreasonable restraint on trade. There are, however, some activities that are illegal under all circumstances, such as price fixing, market allocation and collusive bidding. There is no safe harbor under the antitrust law for professional association activities. Therefore, association meeting participants should refrain from discussing any activity that could potentially be construed as having an anti-competitive effect. Discussions relating to product or service pricing, market allocations, membership restrictions, product standardization or other conditions on trade could arguably be perceived as a restraint on trade and may expose the SOA and its members to antitrust enforcement procedures. While participating in all SOA in person meetings, webinars, teleconferences or side discussions, you should avoid discussing competitively sensitive information with competitors and follow these guidelines: Do not discuss prices for services or products or anything else that might affect prices Do not discuss what you or other entities plan to do in a particular geographic or product markets or with particular customers. Do not speak on behalf of the SOA or any of its committees unless specifically authorized to do so. Do leave a meeting where any anticompetitive pricing or market allocation discussion occurs. Do alert SOA staff and/or legal counsel to any concerning discussions Do consult with legal counsel before raising any matter or making a statement that may involve competitively sensitive information. Adherence to these guidelines involves not only avoidance of antitrust violations, but avoidance of behavior which might be so construed. These guidelines only provide an overview of prohibited activities. SOA legal counsel reviews meeting agenda and materials as deemed appropriate and any discussion that departs from the formal agenda should be scrutinized carefully. Antitrust compliance is everyone s responsibility; however, please seek legal counsel if you have any questions or concerns. 2

4 Presentation Disclaimer Presentations are intended for educational purposes only and do not replace independent professional judgment. Statements of fact and opinions expressed are those of the participants individually and, unless expressly stated to the contrary, are not the opinion or position of the Society of Actuaries, its cosponsors or its committees. The Society of Actuaries does not endorse or approve, and assumes no responsibility for, the content, accuracy or completeness of the information presented. Attendees should note that the sessions are audio-recorded and may be published in various media, including print, audio and video formats without further notice. 3

5 Agenda Pension Section Update & SOA Pension/Retirement Research Andy Peterson Data-driven Research Update Lisa Schilling Committee on Post-Retirement Needs and Risks Update Anna Rappaport 4

6 Pension Section Update 5

7 Introduction to the Pension Section The Pension Section of the Society of Actuaries facilitates the professional development of its members and their adaptation to changes in the retirement industry by: Conducting meetings, webcasts, seminars, and research studies Generating and disseminating literature in the retirement field Providing a forum for its members to connect Providing leadership opportunities Pension Section Council Committee on Post Retirement Needs and Risks Communication Committee Research Committee Continuing Education Committee 6

8 2017 Council Members Elected Members Appointed Members SOA Staff / Support Grace Lattyak Chair (outgoing) Randy Dziubek Vice Chair Laurie Alook Treasurer Jim Anderson Co- Secretary Deb Tully Co- Secretary Judy Ocaya (outgoing) Bonnie Mudd Twohig Dave Cantor (outgoing) Nathan Zahm Communications Team: Faisal Siddiqi Chair (Interim) Research Team: Dylan Porter Chair, Dave Cantor Acting Chair Continuing Education Team: Brett Dutton Chair Andy Peterson Senior Staff Fellow, Retirement Systems Steve Siegel Research Actuary Lisa Schilling Retirement Research Actuary Ruth Schau (incoming) Jane Lesch Section Specialist John Eng (incoming) Julie Curtis Contract assistance Mathieu Laurendeau (incoming) 7

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10 Current projects Section name change to Retirement Section Credibility theory paper Retirement 20/20 call for models Public plans Communicating risk project Retirement income calculator project 9

11 SOA Pension/Retirement Research 10

12 Data-Driven In-House Research (DDIR) Pension Section Research Committee (PSR) SOA Retirement Research Sources Committee on Post- Retirement Needs & Risks (CPRNR) Retirement Plans Experience Committee (RPEC) 11

13 SOA Retirement Research Sources Pension Section Research Committee (PSR) Committee on Post- Retirement Needs & Risks (CPRNR) Focus Practice-based Individual postretirement risks Structure Pension actuaries Pension actuaries & interested parties Research Completed by Project review / oversight Current Leadership Funding Source(s) External researchers Project Oversight Groups Dylan Porter, Dave Cantor Research Budget + Pension Section + REX pool External researchers & Working Groups Project Oversight Groups Anna Rappaport, Cindy Levering, Carol Bogosian Research Budget + Pension Section + REX pool Data-Driven In- House Research (DDIR) Analytical / model-based Staff driven SOA research staff Modeling Oversight Group Lisa Schilling, Patrick Wiese Research Budget Retirement Plans Experience Committee (RPEC) Experience studies (mortality) Actuaries SOA staff & external RPEC (plus peer review / Board) Jim Berberian Experience studies budget * REX pool is a special SOA designated research budget for Expanding Boundaries projects 12

14 Pension Section Research Committee Purposes Initiate development of research studies Coordinate with research being done by other professionals Provide membership with information that will be of utility and interest to those working with retirement systems Include research on actuarial practice and policy issues 13

15 Completed Retirement Research What When Link The Financial Impact of Student Debt on Working and Retired Americans U.S. Public Pension Plan Contribution Indices U.S. Single Employer Pension Plan Contribution Indices Impact of Mortality Change on U.S. Single Employer Pension Plan Funding Provisions for Adverse Deviations in Going Concern Actuarial Valuations 8/ / / / /

16 Completed Retirement Research (cont.) What When Link Discount Rate Sensitivities in Pension Plans 3/ Multiemployer Plan PBC and PBCR Update 1/ Multiemployer Plan Contribution Indices Update Multiemployer Plan Withdrawal Overview Update 1/ multiemployer-pension-plan-analysis/ 1/ Multiemployer Plan Metrics Report 1/ Determining Discount Rates Required to Fund Defined Benefit Plans 1/

17 Current Retirement Research Value of Longevity Pooling Impact of Student Debt on Retirement Quantification Evaluation Framework for Retirement Systems Optimizing Retirement Income The Mechanics & Feasibility of Tontines Canadian Low Interest Rate Environment Liability-Driven Equity Investing & ESGs Measurement of Retirement Benefit Adequacy Low Interest Rate Environment in the US Public Plan Mortality Study Settlement Cost Compared to Going Concern Funding Targets 16

18 Current Retirement Research Multiemployer pension plan funding solution proposals analysis Annual updates to previous analyses MEPP Previous Benefit Cost and Previous Benefit Cost Ratio MEPP withdrawal overview MEPP contribution analysis Single employer contribution analysis Public sector contribution analysis Risk metrics dashboard Public sector Single employer Multiemployer 17

19 Data-driven Research Update 18

20 Contribution Indices Did contributions actually pay down the unfunded liability? If so, at what pace? Single Employer Multiemployer Public Sector 19

21 Single Employer Plans 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% MRC 89% 78% 91% Maintain: Smoothed 78% 89% 91% 7-yr Pace: Smoothed 78% 89% 91% Maintain: Unsmooth 16% 14% 39% 28% 14% 12% 33% 17% 15% 45% 7-yr Pace: Unsmooth 16% 24% 48% 28% 16% 39% 17% 15% 55% No UL 200%+ 150% 199% 100% 149% 50% 99% 0% 49% 2015* * * * * * Partial year of reporting. 20

22 Multiemployer Plans 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 77% 8% MRC 76% 8% 74% 8% MRC w/o CB 22% 45% 18% 30% 43% 16% 25% 50% 13% Maintain Funding 37% 39% 35% 27% 39% 29% 15-yr Pace Funding 24% 51% 14% 25% 43% 12% 35% 45% 6% Maintain CL 55% 39% 57% 36% 62% 33% 15-yr Pace CL 91% 87% 89% No UL (MRC) 200%+ 150% 199% 100% 149% 50% 99% 0% 49% 2015* * * * * * * Partial year of reporting. 21

23 Public Plans States and Large Cities 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% ARC/ADC 40% 56% 44% 52% 50% 46% Maintain 13% 83% 20% 77% 24% 72% 30-yr Amount 11% 85% 14% 83% 20% 77% 15-yr Amount 91% 92% 89% 30-yr Percent 32% 64% 38% 59% 47% 50% 15-yr Percent 9% 87% 10% 87% 19% 78% No UL (ARC) 100% < 100% Note: all benchmarks are computed using the interest/discount rate for GASB reporting. 22

24 Public Plans with Negative Amortization 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% ARC/ADC / Maintain Unfunded Liability 15% 11% 13% 57% 59% 26% 26% 65% 19% Actual Contribution / Maintain Unfunded Liability 46% 41% 37% 40% 13% 14% 54% 40% 4% 100% 75% 99% 50% 74% 25% 49% < 25% Note: all benchmarks are computed using the interest/discount rate for GASB reporting. 23

25 Discount Rate Sensitivities in Pension Plans 24

26 Committee on Post-Retirement Needs and Risks Update 25

27 Committee on Post-Retirement Needs and Risks Background Society of Actuaries post-retirement risk research: nearly 20 years of work Members from many disciplines of retirement expertise Overall program goal: Understand and improve post-retirement risk management Focus on middle income market age 50 and older Housing value is largest financial asset for many Many lack adequate assets to maintain living standard Decisions will require trade-offs on living standards Balance focus on understanding public action, solutions Focus on multiple-stakeholders 26

28 Risk Survey and Public Attitude Research: Public Attitude Research Society of Actuaries Committee on Post-Retirement Needs and Risks (CPRNR) has conducted research on public knowledge and attitudes since : 9 th risk survey; 2 st set of in-depth interviews, specialized surveys of 85+, children of 85+ First time for: specific look at age 85+; builds on 2015 focus groups with individuals retired at least 15 years Each survey combines core items with special subjects: reports published on special subjects

29 Risk Survey and Public Attitude Research: Content of Surveys Major repeating topics: what people see as top risks, how we retire, how risks are managed Special 2017 topics include Long-term care (repeated topic) Housing (new topic) Financial wellness (new topic) Results of risk survey and 85+ interviews presented at this meeting

30 Age 85+ Research Most difficult situations longer need for long-term care requiring paid care; will spend down most middle class family assets Financial management Same as before for those who are independent Often taken over by adult children for people in assisted living Many similarities to 15+ year retirees Group is very resilient Health issues define many lives in this group; mobility issue for nearly all at some level

31 Risk Survey and Public Attitude Research: Big Picture of What We Learned Findings from surveys, focus groups and interviews (including prior years) Top risks inflation, health and long-term care Pre-retirees more concerned than retirees Major methods of risk management reduce spending, pay off debt Gaps in knowledge persist Planning horizons are too short Pre-retiree expectations differ from retiree experience in some areas Lot of consistency over time and between longer term retirees and shorter term retirees, but longer term retirees seem more self assured Lot of similarity between U.S. and Canada, except for health and long-term care issues (based on 2015and 2017 only)

32 Risk Survey and Public Attitude Research: Big Picture of What We Learned RMDs are most common method of asset draw down; retirees do not want to take more than the RMD the RMD is usually spent Planning process based on near-term expected cash flows Housing often biggest asset and underutilized in planning Women more concerned than men Planning for long-term care needs or diminished mental capacity is not being considered

33 Consumer and Advisor Education: Retirement Decision Issue Briefs for Individuals What we learned: people do not even know what the questions are Briefs provide guidance for major retirement decisions Twelve issue briefs written in everyday language being updated six new briefs posted by September 1 Big Question: When Should I Retire? When Retirement Comes Too Soon Women Take the Wheel: Destination Retirement Deciding When to Claim Social Security Designing a Monthly Paycheck for Retirement Treating Asset Allocation Like a Roadmap Securing Health Insurance for the Retirement Journey Taking the Long-Term Care Journey Where to Life in Retirement Estate Planning: Preparing for End of Life Finding Trustworthy Financial Advice for Retirement and Avoiding Pitfalls Lump Sum or Monthly Pension: Which to Take? 32

34 Annual Call for Essays Financial Wellness Essay Collection 2015 Diverse Risks 2016 Financial Wellness being presented at this meeting; essays on website Mix employer and individual perspectives Mix process and content 2017 Solutions essays due by November 1 Mix of actuaries and others Very good response 33

35 Retirement Income Research Joint with Stanford Center on Longevity Team is Steve Vernon, Wade Pfau, Joe Tomlinson First three reports focused on employer plans Fourth project, now underway, focuses on individual market Efficient frontier approach applied to DC income solutions new way to evaluate the basic trade-offs between liquidity and guaranteed income Reverse mortgages included in current project Recommendation re defaults in 401(k) delayed claiming of Social Security to 70, RMD withdrawals from 401(k) 34

36 Consumer and Advisor Education: Age Wise Longevity Infographics Developing series of infographics to explain concepts on longevity and aid people in planning for their own expected lifespans Released three infographics First on longevity risk using the SOA s longevity calculator Second on shocks Third on inflation Provides various messages Example, first You might live longer than expected Your actual lifespan is variable Lifestyle decisions will effect your odds Partners may outlive each other by many years 35

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38 Discussion Questions? Ideas for Research? Feedback for Section Leadership? 37

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