National Conference on Public Employee Retirement Systems

The Voice for Public Pensions

ASOP 4 Toolkit: Measuring Pension Obligations & LDROM

As part of the 2023 revisions to ASOP 4, the Actuarial Standards Board will require a new disclosure, LDROM, that will affect future actuarial valuations. NASRA, NCPERS, NCTR, and NIRS formed a workgroup to develop the ASOP 4 Toolkit: Measuring Pension Obligations and LDROM to help pension funds communicate the new requirements of ASOP 4, avoid misunderstanding and misuse of the new disclosure, and communicate the benefits of a well-diversified investment portfolio. Over 30 public pension directors, senior staff, actuaries, and communications experts (listed below) participated in the workgroup and their work shaped the ultimate outcome.

The toolkit, which has been endorsed by GFOA, includes three products:

  • The first product is a Fact Sheet that presents a clear and simple overview of LDROM—what it is and what it isn’t—and provides appropriate context to frame the correct use of the disclosure for stakeholders of the pension plan, including policymakers, system participants and the general public.
  • The second product is a set of suggested language for public pension actuarial valuations. Following these guidelines will ensure that valuations conform to ASOP 4 and provide context for the measure. Accurate and reliable valuations will maximize stakeholder understanding and the impact on taxpayers' contributions of various liability measures.
  • The third product is a set of frequently asked questions on investment diversification and other important topics. These will help pension fund stakeholders with guidance on special considerations for Risk Sharing Plans.

Overall, the ASOP 4 Toolkit: Measuring Pension Obligations and LDROM is an essential resource for pension funds to educate policymakers and others on the best use of this new disclosure to help avoid misunderstandings concerning pension funding.

GFOAGFOA supports government policies and practices that help to achieve the dual goals of individual retirement security and economically viable communities. Further, GFOA supports transparency and reliability in financial reporting, in particular in items like the actuarial valuation report since it plays an important role for financial decision makers. Therefore, GFOA endorses this toolkit as an important piece of the conversation on this new requirement and its utility.


ASOP 4 Workgroup

Thank you to the members of the ASOP 4 Workgroup who contributed to the development of this toolkit:

Andrew Witte, Aon; Ariana Whaley, Texas ERS; Bill Hallmark, Cheiron; Brent Banister, CavMac; Brian Collins, IMRF; Dan Doonan, NIRS; Dana Bilyeu, NASRA; David Lamoureux, CalSTRS; Dean Kenderdine, NCTR; Dearld Snider, Missouri PSERS/PEERS; Debby Cherney, SBCERA; Hank Kim, NCPERS; Jeannine Markoe Raymond, NASRA; Joe Newton, GRS; Karen Carraher, OPERS; Keith Brainard, NASRA; Kelly Adams, Buck; Kelly Kenneally, NIRS; Leigh Snell, NCTR; Lizzy Lees, NCPERS; Margaret Rogers, NIRS; Melody Prangley, NYSTRS; Paul Angelo, Segal; Richard Young, NYSTRS; Ron Baker, COPERA; Ryan Woodhouse, Colorado Fire & Police; Scott Peppernau, Milliman; Teresa Schilling, CalSTRS; Timothy Johnson, Jacksonville Police & Fire; Tom Lee, NYSTRS; Tom Vicente, Bolton; Travis Almond, SDRS; and Trish Bishop, VRS.