Comments on: In Detroit, were Orr’s pension estimates in ‘good faith’? Bridges, budgets, bonds Mon, 24 Nov 2014 00:29:08 +0000 hourly 1 By: ingramlaw Tue, 03 Sep 2013 23:29:14 +0000 1. The discount rate only affects the present value of accrued liability. It does not affect the actuarial value of assets. Indeed, you can see this in the very tables you cite. Note how the actuarial value does not change, regardless of discount rate used? Pretending it affects the actuarial value of assets is deeply misleading to your readers. I hope you correct this.

2. Using the market value of assets is not “voodoo.” It’s the actual value of assets that the plan has on hand. If the plan needed to sell its assets, today, it would not have the smoothed actuarial value. It would have the market value. Smoothing losses over a period of 7 years is simply a way to dampen asset volatility. But pretending that it’s the more accurate reflecting of the plan assets’ actual value is pretty ridiculous.

3. According to the data you cite, the use of a market value asset valuation method DECREASES the pension assets, contrary to your claim otherwise. You see how the “actuarial value” is higher than the “market value,” in the tables posted?

I sincerely hope there are meaningful corrections made to this post, as it contains a number of elementary errors.

By: areopagetica Sun, 01 Sep 2013 20:20:58 +0000 Defending calculations based on “actuarial standards is nuts. John Bury is right. By this article Ms. Long has reduced her credibility to zero.