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Pension Section
1
A View From The
SOA’s Staff Fellow For
Retirement
by Andrew Peterson
3
6
8
Chairperson’s Corner
By Faisal Siddiqi
Notes From The Editor
By Raymond Berry
Perspectives from
Anna: Interesting Ideas
on Retirement Risk
Management
By Anna M. Rappaport
12 Actuaries Need to Pay
Attention to Behavioral
Research and Finance
and Jeremy Burke
16 Self Adjusting Pension
Designs
By Thomas Lowman
18 Duration and Convexity
for Pension Liabilities
By Martin McCaulay
22 Retirement Income
Security: Why Individual
Account DC Plans Are
Not The Answer
(But Also What Is)
By Robert L. Brown
34 Middle Market
Retirement:
Approaches for
Retirees and NearRetirees
By
Steven Siegel
36 Living to 100: Insight
on the Challenges
and Opportunities of
Longevity
By Jennifer Haid
40 2013 Social Security
Trustees Report
By Bruce Schobel
A View From THE SoA’S
STAFF FELLow FoR
RETIREMEnT
By Andrew Peterson
C
reating lifetime income in retirement plans is a hot topic right
now.
It seems that the broad retirement industry and policy-makers
are waking up to the fact that with ever-increasing
amounts of retirement assets being held in defined contribution (DC)
plans (at least for those working in the private sector), participants
need tools to manage the “pots of money” they will have in retirement.
As I write this column, the U.S. Department of Labor (DOL)
is seeking comments on an outstanding “advance notice of proposed
rulemaking” (ANPRM) on the topic of providing equivalent lifetime
income benefit illustrations for current and projected account balances
in DC plans. In addition, the DOL’s ERISA Advisory Council also focused
on income in DC plans as one of their three study topics in 2012.
That report is available on the ERISA Advisory Council website.
Those of us actuaries who work primarily with defined benefit (DB)
plans might be tempted to take an “I told you so” attitude as we have
observed the trend from DB to DC plans. After all, we have seen
the income-for-life feature of DB plans as one the primary positive
attributes of these plans, and one that has been sorely missing from
(most) DC plans. While pension actuaries might fret about the decline
in the DB system, the fact is that retirees still need to be able
to make money last for their lifetime in retirement, so it is up to us
to find new ways to provide our skills to help in this area. Along that
line, I’d like to highlight two projects that I’m aware of within the
actuarial profession on this topic.
First, the SOA’s Committee on Post-Retirement Needs and Risks
commissioned a paper on this topic that will soon be released. The
name of the paper is, The Next Evolution in Defined Contribution
CONTINUED ON PAGE 7
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