SEI urges prudent assumptions
US - New compliance requirements under Financial Accounting Standards No.87 (FAS 87) and funding rules will require pension fund plan sponsors to make prudent assumptions when selecting discount rates and expected return on asset (ROA) valuations, according to a study by asset manager SEI.
Jon Waite, chief actuary for SEI's Institutional Group, said: "The changes in spreads and in the shape of applicable yield curves require a close examination of the data and a clear process for selection of these assumptions.
"When combined with all of the other changes in pension rules, plan sponsors are in need of transparent and understandable guidance on these and other pension financial management issues."
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