In his letter published in the Aug. 22 Pensions & Investments (“Academy committed to objective analysis”), Thomas F. Wildsmith IV, president of the American Academy of Actuaries, posits that anything published by the academy must be “objective, unbiased and balanced.” That strikes me as being a very reasonable goal for an organization like the AAA.
With that being acknowledged as the desired end result, it seemed unusual to me that he elected to include a matter of his opinion that is certainly not accepted as a universal truth. Specifically, he stated that “financial economics brings a valuable perspective to pension finance issues.” If he wanted to offer his opinion on a matter that would logically be subjected to the scrutiny otherwise advocated by the academy, he should at least have provided balancing opinions that are not in agreement with his position.
The same edition of P&I included the opinion piece titled “PPA in need of overhaul,” which addressed P&I's opinions regarding the unintended consequences of the Pension Protection Act. That editorial concluded with the following noteworthy statement: “From the evidence of the unintended consequences of the PPA, it's clear Congress did not seek, or did not heed, the available advice.”
There are many practitioners in the public defined benefit universe who share the opinion that the financial economics perspective would result in dire unintended consequences for public-sector defined benefit plans similar to those of the PPA on private-sector DB plans. I strongly encourage the American Academy of Actuaries to seek and heed (or at least give equal weight to) the advice available from those who do not share Mr. Wildsmith's opinion regarding the value of the financial economics perspective.
Jefferson City, Mo.
EDITOR'S NOTE: Mr. Findlay is former executive director of the Missouri State Employees' Retirement System.