Has anything change recently in determining an assumption for the expected rate of return on assets?
Thanks
Full Version: Expected Return on Assets under SFAS 87 or 158
QUOTE (§#$%! @ Jul 28 2009, 02:30 PM) 
Has anything change recently in determining an assumption for the expected rate of return on assets?
Thanks
Thanks
Like maybe some analysts taking happy pills?
Or maybe someone ignoring the quality of their bonds?
Nope, can't think of anything.
The sticky issue is what consitutes expenses, in particular investment expenses. Practiitioners with whom I've discussed this issue all (including me) tend to classify as expenses only thoses fees that are readily identifiable (e.g., dollar amount of management fee charged directly to fund) and not hidden fees incorporated in asset charges or unit values. This certainly is not an official position. However, if you use it and are found guilty of pension malfeasance, you will have cell mates.
Do note that it appears you exclude accrued contributions for determining the r.o.i for carrying forward PFB and FSCOB but include accrued contributions for determining average actuarial asset values. More work, less benefit, lesser joy.
My apologies. Should have removed my head from deep freeze the first time I was asked to.
QUOTE (Andy the Actuary @ Jul 28 2009, 02:44 PM)
do not use 2I/(A+B-I) or you face incarceration in pension prision.
The sticky issue is what consitutes expenses, in particular investment expenses. Practiitioners with whom I've discussed this issue all (including me) tend to classify as expenses only thoses fees that are readily identifiable (e.g., dollar amount of management fee charged directly to fund) and not hidden fees incorporated in asset charges or unit values. This certainly is not an official position. However, if you use it and are found guilty of pension malfeasance, you will have cell mates.
Do note that it appears you exclude accrued contributions for determining the r.o.i for carrying forward PFB and FSCOB but include accrued contributions for determining average actuarial asset values. More work, less benefit, lesser joy.
The sticky issue is what consitutes expenses, in particular investment expenses. Practiitioners with whom I've discussed this issue all (including me) tend to classify as expenses only thoses fees that are readily identifiable (e.g., dollar amount of management fee charged directly to fund) and not hidden fees incorporated in asset charges or unit values. This certainly is not an official position. However, if you use it and are found guilty of pension malfeasance, you will have cell mates.
Do note that it appears you exclude accrued contributions for determining the r.o.i for carrying forward PFB and FSCOB but include accrued contributions for determining average actuarial asset values. More work, less benefit, lesser joy.
OK Andy - what does this have to do with FAS 87 expensing?
Not one thing. Terminally brain dead. I failed to look at the title and was thinking PPA.
QUOTE (Andy the Actuary @ Jul 28 2009, 03:43 PM)
Not one thing. Terminally brain dead. I failed to look at the title and was thinking PPA.
A seasonal malady. Take a vacation and call me in a month. Pay the nurse on your way out.
Maybe. Auditor scrutiny?
QUOTE (§#$%! @ Jul 28 2009, 02:30 PM)
Has anything change recently in determining an assumption for the expected rate of return on assets?
Thanks
Thanks
After the past 12 months of yo-yo economic changes, I am seeing long term yields that are reasonably consistent from values a year ago. How much the economy has changed since then - that is an issue. The long term profit potential for the US equity market is lower, and the international market is better than last year. Politically, we have the anti-profit, class-warfare team in charge this year, so long-term profits are under attack.
However, Dave's comment is the only important one here - it changes if the auditors say so.
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