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The newly adopted disclosure elements are organized into Basic and Enhanced categories. The Basic disclosures are suitable for regular actuarial valuation reports often produced annually, and are meant to give the reader enough information to understand plan costs and liabilities. Examples of Basic disclosures include enhanced detail of Normal Cost reporting including payment methods, funding source and determination of cost as a dollar amount or percentage of payroll. Other Basic disclosures include calculation of values and liabilities for the total plan and also significant groups such as active versus retired members.The Enhanced disclosures go beyond current reporting practices, and are expected to be adopted more slowly and for specific reports not necessarily produced on a regular basis. Though these additional disclosures will take time to prepare and may increase costs, the panel believes they add value and should be adopted as normal practice for appropriate reports. Examples of Enhanced disclosures include historical data of 10 years or more for funded status, contributions and funding policy. “The model disclosures adopted by the CAAP recommend significant enhancements, especially in the reporting on risks associated with the funding of these systems,” said CAAP Chair Alan Milligan. “Our recommendations go beyond current reporting guidelines and if adopted, will serve to make annual valuation reports more understandable and meaningful for readers.” The CAAP was formed in 2010 following passage of Senate Bill 1123 (2008). The eight member panel is made up of actuaries appointed by public officeholders and agencies. They are charged with providing public agencies with impartial and independent information on pensions, post-employment benefits and best reporting practices. CAAP also reports to the Legislature each year.For more information, and to view the complete Model Disclosure document, visit http://www.sco.ca.gov/caap_resources.html.
The newly adopted disclosure elements are organized into Basic and Enhanced categories. The Basic disclosures are suitable for regular actuarial valuation reports often produced annually, and are meant to give the reader enough information to understand plan costs and liabilities. Examples of Basic disclosures include enhanced detail of Normal Cost reporting including payment methods, funding source and determination of cost as a dollar amount or percentage of payroll. Other Basic disclosures include calculation of values and liabilities for the total plan and also significant groups such as active versus retired members.The Enhanced disclosures go beyond current reporting practices, and are expected to be adopted more slowly and for specific reports not necessarily produced on a regular basis. Though these additional disclosures will take time to prepare and may increase costs, the panel believes they add value and should be adopted as normal practice for appropriate reports. Examples of Enhanced disclosures include historical data of 10 years or more for funded status, contributions and funding policy.
“The model disclosures adopted by the CAAP recommend significant enhancements, especially in the reporting on risks associated with the funding of these systems,” said CAAP Chair Alan Milligan. “Our recommendations go beyond current reporting guidelines and if adopted, will serve to make annual valuation reports more understandable and meaningful for readers.”
Rebecca Mooreeditors@plansponsor.com
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