Pennsylvania Code
Title 16 - COMMUNITY AFFAIRS
Part IV - Public Employee Retirement Commission
Chapter 203 - ACTUARIAL AND FINANCIAL REPORTS ON MUNICIPAL EMPLOYE PENSION SYSTEMS
Section 203.5 - Procedure for authorization of the use of an approximation technique for the valuation of ancillary benefits
Current through Register Vol. 54, No. 12, March 23, 2024
(a) Authorization to utilize an approximation technique for the valuation of ancillary benefits. An actuarial valuation report that uses an aproximation technique for the valuation of ancillary benefits shall include a statement, signed by the actuary, justifying the use of the approximation technique. The statement shall indicate the following:
(b) Acceptable approximation techniques. The acceptable approximation technique for the valuation of ancillary benefits shall be a loading factor. The loading factor shall be percentage factors used to adjust the actuarial present value of future retirement benefits for active members of the municipal pension plan to reflect an expected increase in the accrued liability and normal cost attributable to ancillary benefits. The percentage loading factors utilized shall be set utilizing the best judgment of the actuary preparing the actuarial valuation report and may not result in an increase in the total normal cost attributable to ancillary benefits of more than 15% or an increase in the total normal cost attributable to an ancillary benefit of more than 10%.
(c) Additional documentation required to accompany actuarial valuation report. If an approximation technique for the valuation of ancillary benefits is used, the actuary preparing the actuarial valuation report shall also include the following: