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Short Answer To Your Question Is That It Is Bunk
Short Answer To Your Question Is That It Is Bunk
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Driscoll, David <David.Driscol1@buckconsultants .com> Tuesday, January 29, 2013 7:58 PM Don Rohan Richard Tettamant RE: The 80% (89%?) Threshold The 80% Pension Funding Standard Myth .pdf
Hi, Don :
I recalled a short paper that was publ ished last year that addresses this very question . It took me a while to dig it up but I did find it, and it is attached. The short answer to your question is that it is bunk, but so many people have equated 80% with healthy funding that people reflexively use it without thinking about whether there is any analytic support for that particular standard (there isn't).
Let me know what you think of th e paper after you have read it! David David L. Driscoll , F.S.A. Principal, Consulting Actu ary
Buck Consultants 101 Federal si.. Suit e 900 Boston, M A 02110 Tel : 617 .275 .8028 Fax: 201 .633.5168 Mobile : 617.512.8983 Mob ile 2: 617 .306.201 1
David .Driscoll@buckconsultants.com
From: Don Rohan [mailto :d,rohan@dpfp.orgl Sent: Thursday, January 24, 2013 10 :49 AM To: Driscoll, David Cc: Richard Tettamant Subject:
David, below is a quote from the attached policy statement from the Texas Public Policy Foundation. We often hear the 89% number being thrown around and it seems to be getting life of its own - it must be true, every one says it. Please comment as to whether (1) it is true - most actuaries think so, or (2) it is bunk.