January 29, 1999

Dear Mr. Hartman:

I am pleased to enclose my article analyzing the method used by the Social Security actuaries to arrive at the GDP assumption. My data are from the Annual Reports of the OASDI Trustees for the 20-year period 1979-1998. As you will note, it does not appear to me that their method is in accordance with ASP No. 32, Social Insurance, and I am interested in having the opinion of the Actuarial Standards Board on this.

The following three actuaries, who have special expertise on setting assumptions, have read my technical analysis and are in agreement with it:

Robert L. Brown, F.S.A., Professor of Actuarial Science, University of Waterloo.

Robert J. Johansen, F.S.A., Chairperson, Committee on Life Insurance Research, Society of Actuaries.

J. Bruce MacDonald, F.S.A., author of the Study Note for the Society Actuaries on valuation methods and assumptions for social insurance pension plans.

A copy will be sent to the other members of the Board next week and to other actuaries I believe have an interest in this subject.

Enclosed, too, as background material is my MEMO on the "Changes in Methods and Assumptions, 1979-1998."

With best regards,

Sincerely,

David Langer

© 2001 DAVID LANGER COMPANY, INC.