WASHINGTON, Jan. 8, 2015 /PRNewswire-USNewswire/ -- There's a new way of evaluating how well public and private retirement systems and proposals to reform them meet the needs of participants, sponsors, and other stakeholders. The American Academy of Actuaries is grading retirement-income systems and reform proposals. The Academy bestowed its highest marks on retirement legislation proposed last year by then-U.S. Sen. Tom Harkin and a Canadian government pension system among five systems and proposals that were graded.
A new video highlights the overall grades calculated by the Forward Thinking Task Force of the Academy's Pension Practice Council:
- USA Retirement Funds Act (S.1979, 113th Congress): A-
- New Brunswick Shared Risk Model: A-
- South Dakota Retirement System: B+
- Current-system traditional defined benefit plan: C+
- Current-system safe harbor defined contribution plan: C
"The overall grades provide a general assessment of whether a system is well-designed to achieve its retirement-income purpose," said Academy Senior Pension Fellow Donald Fuerst. "This assessment is based on factors such as whether the system is sustainable, supports good governance and decision-making, and avoids imposing undue burdens on stakeholders."
The release of the grades is part of an Academy initiative, Retirement for the AGES, which provides a framework to assess the strengths and shortcomings of retirement systems and reform proposals based on four fundamental principles: Alignment, Governance, Efficiency, and Sustainability (AGES). Overall grades are determined based on the grades received for the four principles. Detailed assessments containing the analysis of the five systems and proposals are available on the AGES webpage of the Academy's website, www.actuary.org. The webpage also contains links to the full recordings of a panel discussion where the scores were released and an Academy forum earlier in 2014 that explored why and how the AGES principles were developed, how the task force applied them in grading, and how some systems rate themselves against the AGES principles.
The task force is assessing several other retirement-income systems and proposals for future release.
The American Academy of Actuaries is an 18,000+ member professional association whose mission is to serve the public and the U.S. actuarial profession. The Academy assists public policymakers on all levels by providing leadership, objective expertise, and actuarial advice on risk and financial security issues. The Academy also sets qualification, practice, and professionalism standards for actuaries in the United States.
SOURCE American Academy of Actuaries