PENSION COMMITTEE PRACTICE NOTE – 2009
TABLE OF CONTENTS
Introduction............................................................................................................. 4 I. Economic Assumptions ........................................................................................ 6 General Impact of ASOP No. 27.......................................................................... 6 Compensation Scale ............................................................................................ 7 Social Security..................................................................................................... 9 Growth of Individual Account Balances .............................................................. 9 Variable Conversion Factors.............................................................................. 10 Cost-of-Living Adjustments (COLAs) ............................................................... 10 Setting Assumptions for Floors, Ceilings, and Other Asymmetric Plan Provisions .......................................................................................................................... 10 II. Demographic and Other Noneconomic Assumptions......................................... 13 General Impact of ASOP No. 35........................................................................ 13 Retirement ......................................................................................................... 14 Termination of Employment .............................................................................. 16 Optional Form of Benefit................................................................................... 20 Administrative Expenses ................................................................................... 21 Household Composition..................................................................................... 21 Marriage, Divorce, Remarriage, and Age Difference.......................................... 22 Open Group....................................................................................................... 22 Hours of Service................................................................................................ 22 Transfers and Return to Employment................................................................. 23 Unpredictable Contingent Event Benefits .......................................................... 23 III. Disclosure and Documentation......................................................................... 24
3