Wednesday, October 11, 2006
The main paper is 72 pages long; the executive summary is 13 pages. No wonder so many people think actuaries are poor communicators.
It's a very worthwhile read, though, if you are interested in the "State of the Profession." Comments are welcome through October 31st.
Friday, September 29, 2006
Biggest change in pension accounting since FAS87. First PPA now this. This is an interesting year to be working in pension.
Friday, September 22, 2006
I am now an Associate of the Society of Actuaries.
So now I can actually call myself an actuary.
Wednesday, September 20, 2006
Let me see if I have this straight. A fund takes the highly risky decision to invest 20% of their assets in hedge funds, some of which invest in things like gas trading futures ... and this earns them the Public Plan of the Year award? What the ...? No wonder the pension industry is such a mess.
Friday, September 08, 2006
Saturday, September 02, 2006
Friday, September 01, 2006
Friday, August 18, 2006
Thursday, August 17, 2006
Edited to add link to a PPA blog
Monday, August 07, 2006
A three-judge panel of the Seventh Circuit Court of Appeals in Chicago yesterday ruled IBM did not discriminate against its older employees in 1999 when it converted its pension plan to cash balance. The decision reverses a 2003 federal court ruling that the change discriminated against older workers. The decision also saves IBM from having to pay up to $1.4 billion to 140,000 older employees and retirees who were affected by the conversion. In its ruling, the appeals court acknowledged that older workers were correct in perceiving "that they were worse off under the cash balance approach" than the defined benefit approach, but "removing a feature that gave extra benefits to the old differs from discriminating against them." The plaintiffs intend to ask the full appeals court to reconsider the ruling.
Maybe if this decision had come down in 2003 IBM wouldn't have frozen their plan.
Tuesday, June 27, 2006
Hewitt announced the departure of Michael Salvino, co-leader of its HRO sales and accounts group. The announcement comes on the heels of the announced resignations of Hewitt’s CEO Dale Gifford and Bryan Doyle, president of HRO. Hewitt doesn’t appear to have a successor in place for Salvino. According to some industry observers that could be hinting at a sale of its HRO business. By any standards, the three departures signal a major shakeup only two years after the merger of Hewitt and Exult was announced. At the time of the announcement, the merger was regarded as nothing short of a defining moment in the history of HRO.
And now, while the marriage is still intact, the honeymoon is clearly over. While the union may yet last longer than a typical Hollywood wedding, if the paparazzi could stalk companies, they’d be all over this relationship. I haven’t seen the Las Vegas line, but put the over/under at 18 months and take the under. When the merger first took place it appeared to be the perfect marriage. Hewitt was regarded as the gold standard in benefits outsourcing, setting the paradigm in how total benefits administration was delivered. Exult on the other hand had the most mature of the practices and model of BPO of HR. The orders started pouring in! It would appear, however that the orders came in too fast. Reportedly (and allegedly) implementation became more difficult, and now perhaps Hewitt isn’t competing effectively for the current opportunities.
The rumors had been that Hewitt might be looking to jettison HRO and that Accenture would be the taker. More recently ADP and Fidelity have come into the mix of rumors. The thinking is that another major market player will have better luck in turning the Exult model to profitability. If Hewitt couldn’t turn a profit with it, I don’t think ADP or Fidelity could either. Hewitt was the best at turning administration into profitability. Fidelity and ADP are the best at turning high volume transaction processing into profit. The real problem is that HRO is neither solely administration nor high volume transaction processing. When Hewitt offered services outside of its core model, the troubles began. Now it is hard to tell what the model is. Is it based on Cyborg? Is it a lift and shift of your PeopleSoft or SAP platform? Is it a one-to-many or a one-off model? In the final analysis, we may very well see that the Hewitt-Exult merger did indeed change the way the market views HRO but not in the way in which people may have thought only one year ago.
Thursday, June 22, 2006
Imagine that. Dramatically increasing demand by instituting Medicare drug coverage caused prices to go up dramatically. Who could have predicted such a thing? Certainly not me. I mean, it's not like they explain this in Economics 101 or anything.
Monday, April 03, 2006
Monday, February 20, 2006
Friday, February 03, 2006
Wednesday, February 01, 2006
Monday, January 23, 2006
That's the third big plan this month. This could end up being the worst year ever for defined benefit plans.
Tuesday, January 17, 2006
Monday, January 16, 2006
The Medicare prescription drug plan is two weeks old, and the going has been rocky especially for the nation's sickest and poorest elderly and disabled. The general consensus is the government has botched the start-up of the program. If it could go wrong, it probably has. No one seems to have definitive answers to questions. Patients are being turned away or overcharged at pharmacies. At least 20 states have stepped in to say they will cover the drug costs of low-income people who have been turned away because of federal foul-ups. On Friday, the intervention of the states led the federal government to tell insurers they must provide a 30-day supply of any drug that a beneficiary was previously taking. The government also stressed that poor people may not be charged more than $5 for a covered drug.
Sources: The Washington Post and The New York Times
Friday, January 06, 2006
Sources: NYT and AJC
1. In 1979 around 62% of active workers were covered by DB plans. Today, around 18% of active workers are covered.
2. From 1986 to 2004, over 100,000 single-employer plans with about 7.5 million participants were terminated.
Sunday, January 01, 2006
Hang on, it's going to be a bumpy 2006 in the outsourcing industry.