The Actuarial Standards Board has adopted revised versions of two important actuarial standards of practice (ASOPs) for the calculation of pension plan liabilities which will go into effect in 2014. The revised ASOPs are ASOP 4 on Measuring Pension Obligations and Determining Pension Plan Costs or Contributions and ASOP 27 on Selection of Economic Assumptions for Measuring Pension Obligations.
From the ASB website:
ASB Adopts Revised Version of ASOP No. 4
The ASB recently adopted a revised version of ASOP No. 4, Measuring Pension Obligations and Determining Pension Plan Costs or Contributions. Key changes from the current standard include modifications to language pertaining to disclosure of funded status; disclosure of rationale for changes in cost or contribution allocation procedure; assessment of contribution allocation procedure or funding policy; prescribed assumptions or methods; and plan provisions that are difficult to measure. The adopted ASOP No. 4 was exposed twice between January 2012 and May 2013, generating a total of 30 comments. ASOP No. 4 will be effective for any work product with a measurement date on or after December 31, 2014. The final version can be viewed under the tab "Current Actuarial Standards of Practice."
ASB Adopts Revised Version of ASOP No. 27
The ASB recently adopted a revised version of ASOP No. 27, Selection of Economic Assumptions for Measuring Pension Obligations. The second exposure draft of ASOP No. 27 was issued in January 2012 and received fifteen comment letters. As a result, various changes were made to the final standard in response to those comments including revising the section on Adverse Deviation or Other Valuation Issues to note that an actuary may determine that it is appropriate to adjust the economic assumptions when valuing plan provisions that are difficult to measure, as discussed in ASOP No. 4; and revising the Assumptions Used section to require that each significant assumption be disclosed. This standard will be effective for any actuarial work product with a measurement date on or after September 30, 2014.
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