ACTUARIAL STANDARDS, TRANSPARENCY AND DISCLOSURE Clause Samples
The "Actuarial Standards, Transparency and Disclosure" clause establishes requirements for the use of recognized actuarial principles and mandates open communication regarding actuarial methods and results. In practice, this clause ensures that any actuarial calculations, such as those related to insurance premiums, reserves, or pension obligations, are performed according to industry standards and that the underlying assumptions, methodologies, and outcomes are clearly disclosed to relevant parties. Its core function is to promote accuracy, consistency, and trust by making actuarial processes transparent and understandable, thereby reducing the risk of misunderstandings or disputes over financial calculations.
ACTUARIAL STANDARDS, TRANSPARENCY AND DISCLOSURE. The City and Trust agree that the assumed annual actuarial rate of return should remain at 7.0% through the term of the 2014 Agreement, defined below, unless otherwise agreed by the City and JPFPF based on sound actuarial practices, or as otherwise required by applicable law. An actuarial valuation of the JPFPF shall be performed by the JPFPF actuary annually, as of October 1 of each fiscal year. The annual actuarial valuations shall be completed and delivered as expeditiously as possible to the Board of Trustees, the Financial Advisory and Investment Committee, the City’s Director of Finance and to the City Council Auditor promptly upon completion but in any event the JPFPF shall complete and deliver such analyses and reports no later than 120 days after the end of each fiscal year, provided the City has responded promptly to requests made by the JPFPF for information from the City that is necessary for the preparation of such valuations.
A. Actuarial analysis and reporting by the JPFPF will utilize the following standards in addition to other standards governing its work:
1. Annual ARC calculations based on most recent actuarial assumptions;
2. Alternative funding scenarios based on variable investment performance in addition to the base case, that extend to future years and incorporate volatility;
3. The latest “experience studies” prepared by the JPFPF actuary;
4. Consistency in actuarial methods;
ACTUARIAL STANDARDS, TRANSPARENCY AND DISCLOSURE. The assumed annual actuarial rate of return should remain at 7.0% through the term of the “2014 Agreement”, defined below, unless otherwise agreed by the City and JPFPF based on sound actuarial practices, or as otherwise required by applicable law. An actuarial valuation of the JPFPF shall be performed by the JPFPF’s actuary annually, as of October 1 of each fiscal year. The annual actuarial valuations shall be completed and delivered as expeditiously as possible to the Board, the Financial Advisory and Investment Committee, the City’s Director of Finance and to the City Council Auditor promptly upon completion but in any event the JPFPF shall complete and deliver such analyses and reports no later than 120 days after the end of each fiscal year, provided the City has responded promptly to requests made by the JPFPF for information from the City that is necessary for the preparation of such valuations. Actuarial analysis and reporting by the JPFPF will utilize the following standards in addition to other standards governing its work:
a. Annual ARC calculations based on most recent actuarial assumptions;
b. Alternative funding scenarios based on variable investment performance in addition to the base case, that extend to future years and incorporate volatility;
c. The latest “experience studies” prepared by the JPFPF’s actuary;
d. Consistency in actuarial methods;
e. Accrual method: Entry Age Normal (EAN);
f. Annual normal cost disclosure; Note: it is now likely that since there will be two tiers of benefits if the Task Force’s recommended design is implemented, the normal cost should be broken out for each tier.
g. Actuarial practices will be consistent from year to year unless changed through an “experience study” or decision of the Board, with advice from the Financial Advisory and Investment Committee, or unless necessary for compliance with applicable laws or regulations;
h. Unfunded liabilities will be amortized as separate annual bases over closed 30- year periods or less, unless otherwise required by law; and
i. Clear and transparent disclosure of actuarial and financial matters, including distributing to City’s Chief Financial Officer and City Council Auditor, and prompt posting on the Fund’s website, the JPFPF’s quarterly investment return reports showing results both gross and net of investment fees and with comparisons to assumption and benchmarks of the JPFPF, and to results of comparable pension funds. In addition to the foregoing regarding th...