The Actuarial Standards Board (ASB) approved a second exposure draft of a proposed revision of Actuarial Standard of Practice (ASOP) No. 4, Measuring Pension Obligations and Determining Pension Plan Costs or Contributions.
The ASOP provides guidance to actuaries when performing actuarial services with respect to measuring obligations under a defined benefit pension plan also referred to as “plan” or “pension plan” throughout this standard and determining periodic costs or actuarially determined contributions for such plans. Notable changes since the first exposure draft include expanding the ASOP’s scope to clarify the guidance when an assumption or method is not selected by the actuary; renaming the Investment Risk Defeasement Measure section to Low-Default-Risk Obligation Measure and substantially modifying its guidance for calculating such a measure; and modifying the Output Smoothing Method section to clarify how to determine whether a reasonable relationship exists with the actuarially determined contribution without regard to the output smoothing method.
The comment deadline for the second exposure draft, which can be viewed here, is April 30, 2020.
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