From around the 6-minute mark....Participation in DROP is not an indicator of actual retirement date any more than someone becoming eligible is. You don't know who will leave immediately after completing DROP, you don't who will decide to leave it early, you don't know who will die while in DROP, you don't know who will work for two more years after DROP to reset their benefits to their new salary, etc., etc., etc.
From around 7:30 mark...a bunch of incentives listed, not one disincentive listed lol. Well, spoiler alert, DROPs are a big part of why so many systems are underfunded today. Doesn't it seem odd that systems overall are so underfunded while the stock market trajectory over the last 25 years has been mostly straight up?
The last 25 years included 2008; in the years following, one significant head wind for funded ratios was the use of increasingly conservative assumptions. Many systems that look about as funded as they did decades ago were assuming 8% return back then and 7% today, not to mention the impact of mortality assumptions that include generational projection, which were previously less common.
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Great presentation - chock full of details and real world cases.
From around the 6-minute mark....Participation in DROP is not an indicator of actual retirement date any more than someone becoming eligible is. You don't know who will leave immediately after completing DROP, you don't who will decide to leave it early, you don't know who will die while in DROP, you don't know who will work for two more years after DROP to reset their benefits to their new salary, etc., etc., etc.
From around 7:30 mark...a bunch of incentives listed, not one disincentive listed lol. Well, spoiler alert, DROPs are a big part of why so many systems are underfunded today. Doesn't it seem odd that systems overall are so underfunded while the stock market trajectory over the last 25 years has been mostly straight up?
The last 25 years included 2008; in the years following, one significant head wind for funded ratios was the use of increasingly conservative assumptions. Many systems that look about as funded as they did decades ago were assuming 8% return back then and 7% today, not to mention the impact of mortality assumptions that include generational projection, which were previously less common.