The Society of Actuaries
475 N. Martingale Rd. Suite 800
Schaumburg, IL 60173
Ph: 847/706-3500
Fax: 847-706-3599
NEWS RELEASE
CONTACT: Jackie Bitowt, Linda Heacox
847/706-3500
lheacox@soa.org
Society of Actuaries
DATE: January 21, 1997
Actuaries' Assumptions In Public Retirement Systems Highly Accurate, New Study Says
SCHAUMBURG, Ill. -- Actuaries for public employee retirement systems (PERS) have been highly accurate in making critical demographic assumptions that affect the cost of retirement plans. In the first comprehensive compilation and review of actuarial assumptions for public sector plans, the ratio of actual to expected disablement rates, withdrawal rates, retirement rates, and retiree mortality rates was between 90 - 100%. Other assumptions studied included: disabled mortality rates, interest rates, and salary scales. The widest variance between expected and actual experience was in the area of active mortality, an area of assumption not considered to have a major impact on plan costs.
A Study of Public Employee Retirement Systems supersedes prior efforts in this area in breadth and detail. It looks at more than 80 public retirement systems, more than 100 different retirement plans, and 60 experience studies (tables of demographic data compiled from the experience of insurers). All plan types and sizes were represented, including general public employee groups, police officers, fire-fighters, and educators. In addition, five studies of retirement systems selected for their diversity were reviewed in more detail. They included California teachers, Ohio highway patrol, and employees in Mississippi, New York, and Texas.
The study, which is available free of charge to journalists, is co-authored by Fellows of the Society of Actuaries Timothy P. Peach and Michael J. Samet of Ernst & Young; and by W. Paul Zorn of the Government Finance Officers Association. Prices for the study are $125 per copy for private sector purchasers and $75 for public sector purchasers. To purchase the report, call Cathy Cimo at the Society of Actuaries, (847) 706-3526.
|
No. of PERS by Type |
||||
| Disablement Rate | General Employees | Police/Fire | Teachers/School | Total |
|---|---|---|---|---|
| less than 40% | 1 | 2 | 3 | 6 |
| 40-60% | 7 | 6 | 2 | 15 |
| 60-80% | 6 | 5 | 6 | 17 |
| 80-120% | 9 | 2 | 7 | 18 |
| 120-140% | 3 | 1 | 2 | 6 |
| 140-160% | 0 | 2 | 1 | 3 |
| greater than 160% | 4 | 2 | 2 | 8 |
| Overall Ratio | 93% | 69% | 93% | 92% |
|
No. of PERS by Type |
||||
| Mortality Rates | General Employees | Police/Fire | Teachers/School | Total |
|---|---|---|---|---|
| less than 40% | 0 | 0 | 0 | 0 |
| 40-60% | 0 | 2 | 0 | 2 |
| 60-80% | 3 | 3 | 1 | 7 |
| 80-120% | 23 | 6 | 22 | 51 |
| 120-1400% | 2 | 1 | 1 | 4 |
| 140-160% | 0 | 2 | 0 | 2 |
| greater than 160% | 0 | 2 | 0 | 2 |
| Overall Ratio | 103% | 88% | 94% | 98% |
|
No. of PERS by Type |
||||
| Termination | General Employees | Police/Fire | Teachers/School | Total |
|---|---|---|---|---|
| less than 40% | 1 | 1 | 1 | 3 |
| 40-60% | 4 | 4 | 1 | 9 |
| 60-80% | 4 | 9 | 4 | 17 |
| 80-120% | 19 | 4 | 13 | 36 |
| 120-140% | 2 | 0 | 0 | 2 |
| 140-160% | 1 | 1 | 1 | 3 |
| greater than 160% | 0 | 0 | 2 | 2 |
| Overall Ratio | 89% | 65% | 104% | 94% |
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