California Actuarial Advisory Panel

The California Actuarial Advisory Panel (CAAP) was established by the legislature to provide impartial and independent information on pensions, other postemployment benefits, and best practices to public agencies. This document is intended as advice to actuaries and retirement boards in the setting of funding policy.

This document develops the principal elements and parameters of an actuarial funding policy for representative California public pension and OPEB plans, as well as other similar U.S. public sector plans. It includes the development of a Level Cost Allocation Model (LCAM) as a basis for setting funding policies.

Actuarial Funding Policies and Practices for Public Pension and OPEB Plans and Level Cost Allocation Model - February 2013

Conference of Consulting Actuaries Public Plans Community

This “white paper” is based on funding policy discussions among the members of the Conference of Consulting Actuaries Public Plans Community (CCA PPC). The members generally concurred with the funding policy white paper above prepared by the California Actuarial Advisory Panel (CAAP) and the level cost allocation model developed therein and have built directly on the CAAP document in developing its own funding policy guidance. This white paper is intended for a national audience, as part of a nation-wide review and discussion of funding policies for public pension plans.

Actuarial Funding Policies and Practices for Public Pension Plans - October 2014

Pension Funding Task Force

National organizations representing the nation’s governors, state legislatures, local officials and public finance professionals formed a Pension Funding Task Force and released Pension Funding: A Guide For Elected Officials in March 2013, which recommends state and local governments adopt pension funding policies based on five general policy objectives.

Pension Funding: A Guide for Elected Officials - March 2013

American Academy of Actuaries

The actuarial community has been hard at work in recent years trying to dispel the myth that a pension plan is adequately funded if the funded ratio is at least 80%.

The 80% Pension Funding Standard Myth - July 2012
The 80% Pension Funding Myth - April 2014

Blue Ribbon Panel on Public Pension Plan Funding

In April 2013, the Society of Actuaries commissioned the SOA Blue Ribbon Panel to address the questions, what changes in plan funding practices, governance and other matters help ensure that public plans can deliver on the benefit promises their sponsors have made to public employees? In February 2014, the results of the Panel’s work were published in this report.

Report of the Blue Ribbon Panel on Public Pension Funding - February 2014