A Statement Of The
Actuarial Cost Method Selected And Actuarial Assumptions;
A comprehensive funding policy has several moving parts, including an
actuarial cost method, asset-smoothing techniques, and the manner in which any unfunded liabilities are amortized.
The annual cost is based on an
actuarial cost method.
Six actuarial methods are allowed; however, special disclosure is needed it the aggregate
actuarial cost method is used.
Governments that use the aggregate
actuarial cost method to disclose the funded status and present a multi-year schedule of funding progress using the entry age
actuarial cost method as a surrogate; these governments previously were not required to provide this information.
An
actuarial cost method provides a flexible funding schedule for computing both annual contributions and accrued liability for a pension fund.
The
actuarial cost method and funding assumptions would allow the creation of large deductions.
Recommendation on which
actuarial cost method should be used; entry age; frozen entry age, attained age, unit credit or aggregate;
actuarial cost method, asset smoothing, and amortization) that have standardized how an ARC is calculated have been eliminated from GAAP.
Actuarial cost method--One of the following
actuarial cost methods should be used: entry age, frozen entry age, attained age, frozen attained age, projected unit credit, (10) or aggregate, as described in paragraph 41, Section B.
A 10-year minimum amortization period would apply for decreases in the total unfunded actuarial accrued liability due to changing the
actuarial cost method or asset valuation method.
