Pennsylvania Code › Title 16 - COMMUNITY AFFAIRS › Part IV - Public Employee Retirement Commission › Chapter 203 - ACTUARIAL AND FINANCIAL REPORTS ON MUNICIPAL EMPLOYE PENSION SYSTEMS › Section 203.4 - Procedure for authorization of alternative actuarial cost method for actuarial valuation reports

Current through Register Vol. 54, No. 28, July 13, 2024
(a)
Application for authorization.
A separate application to the
				Commission for authorization to utilize an alternative actuarial cost method
				for the actuarial valuation report shall be made by a municipality that desires
				the authorization. A separate application shall be made for each municipal
				pension plan for which the authorization is sought. The application shall be
				filed by the chief administrative officer of the municipality following
				adoption by the governing body of the municipality of a resolution requesting
				the authorization. No application filed on behalf of more than one municipality
				or more than one municipal pension plan or filed by a person other than the
				chief administrative officer of the affected municipality will be a valid
				application.
(b)
Deadline
				date for filing application for authorization.
The application for
				authorization to utilize an alternative actuarial cost method for the actuarial
				valuation report shall be filed by the last business day occurring 6 months
				prior to the date on which the actuarial valuation report is due to be filed
				with the Commonwealth.
(c)
Contents of the application for authorization.
The application
				for authorization to utilize an alternative actuarial cost method for the
				actuarial valuation report shall be prepared by the actuary of the municipal
				pension plan for which the authorization is sought. The application for
				authorization shall request a particular alternative actuarial cost method and
				shall indicate, in general, the impracticality, difficulty and undesirability
				that would result from utilizing the actuarial cost method prescribed in
				section 202(b) of the act (53 P. S. §
										895.202(b)) and the greater
				practicality, facility and desirability of utilizing the requested alternative
				actuarial cost method. The application for authorization shall include the
				following:
(1) Reasons why use of the
				prescribed actuarial cost method is not in the best interests of the
				participants and beneficiaries of the municipal pension plan and why use of the
				requested alternative actuarial cost method is in the best interests of the
				participants and beneficiaries of the municipal pension plan.
(2) An algebraic demonstration of the
				conditions under which the alternative actuarial cost method recognizes
				accruing pension plan liabilities on a level basis over time as a percentage of
				covered payroll and produces stability in the annual actuarial cost of the
				pension plan from year to year. Alternatively, if the Commission recognizes the
				actuarial cost method as a budgeting tool for municipal government for this
				particular expenditure item, an algebraic demonstration that the requested
				alternative actuarial cost method will produce a cost incidence pattern over
				time that corresponds to the adquately documented likely future revenue
				availability pattern of the municipality. Algebraic demonstrations shall be
				based on the actuarial assumptions used for the most recent prior actuarial
				valuation unless clearly unreasonable and on the demographics of the current
				active and benefit recipient pension plan population.