Enrolled Actuaries Meeting 2014 – Miscellany

Among the noteworthy pieces of information that I got out of this week’s Enrolled Actuaries meeting which, though not the views of any employer of the speakers, I believe for the most part to be factual (except for maybe the first one which seemed like a joke):

Ethics

There were two separate sessions on ethics (203 – Ethics and 503 – More Ethics) which were packed (400) primarily because there is now a requirement for EA renewal to have two hours of credits in ethics.  These sessions consisted of discussing about a dozen case studies amongst ourselves which was kind of surprising since I half expected to be preached to by some ethics expert.  I wondered if this would work for other professions that might have their own ethics issues (politicians, used-car salesmen, dictators).  Would putting them into a room kicking around how ethical it would be to annex Crimea count as advancing their ethical base?  Anyway, the point here is that at the final General Session it was announced that attendees of these two sessions would get 100% Core credit and 100% Professionalism credit but only 75% for Ethics credit (which is the part that might be a joke except that nobody laughed when it was announced so either it is true or pension actuaries have no senses of humor – or both ).

Passings

Paulette Tino and Roland Cross (sp?) acknowledged with a moment of silence

RP-2014

We have a new mortality table based on 10.5 million life-years of uninsured private plan data.  Though I am presumably precluded from linking to all the charts and heat maps there is one dumbed-down slide meant for public consumption that I will chance.  It was the feeling that public plans would not be adopting this table anytime soon.

“Fund the New ARC”

Main point from the Public Plan workshop which did not see a problem with the Defined Benefit concept for government workers but rather with the governments themselves that do not make their Annual Required Contributions which, through techniques like rolling 30-year amortization of unfundeds, are understated to begin with.  Fund an ARC developed without the gimmicks and we do not have a public pension crisis (though we may have a property tax crisis).

EA Renewals in the mail

From the dialogue with the Joint Board: 3,500 actuaries applied for their EA renewal for this cycle that begins April 1 with 1,900 using the pay.gov internet system and the rest mailing in their application and $250.  This was a reduction from the high of 5 years ago (coincidentally when the renewal fee went from $25 to $250) but since last summer there has been a rise in applications for new EAs (from getting 10-15 applications per month to 35-40).  Approval letters started going out this week and 300 per week are expected to be sent.  You should start using the 14- prefix as of April 1 even if the letter has not physically come.

Social Security

According to Stephen Goss by 2030 something will need to be done.

 

 

8 responses to this post.

  1. Posted by Anonymous on March 28, 2014 at 2:06 pm

    Hey John,when will there be a ruling on the COLA reinstatement?

    Reply

    • The briefs should have been in a month ago so it depends when the judges feel like announcing their decision. The additional topics that were to be briefed, impact of IRS Code and Arizona decision on restoring COLAs, were immaterial and abetting COLA reinstatement respectively.

      The feeling in the courtroom the day of the hearing was June/July around the time the new tax year starts for the state.

      Reply

      • Posted by Anonymous on March 28, 2014 at 7:55 pm

        I am shocked that if the COLA is reinstated that there would retroactive payments made. The government usually avoids that sort of thing even if the COLA is reinstated.

        Reply

  2. Posted by Anonymous on March 28, 2014 at 4:32 pm

    I’m pretty sure the 75% ethics thing was not a joke.

    Reply

    • It sounded like a joke and a fairly well constructed one at that.

      What made me think it was real was that nobody laughed and the speaker never acknowledged that he may be kidding.

      Reply

  3. Posted by MJ on March 31, 2014 at 8:28 pm

    Ok so there is enough blame to go around as to ethics, integrity, etc. Still begs the question, when will the pensions be reformed to reflect the realties of today?

    Reply

    • Posted by Tough Love on March 31, 2014 at 9:31 pm

      I don’t believe the Unions will give up anything (of material value) until they are CONVINCED that they WILL get very material pension haircuts w/o material givebacks. If NJ’s pensions were more local, like those of RI or PA, an actual failure of a city’s plan with pension reductions would drive that point home, but with NJ’s Plans all being at the State level that pathway seems unlikely.

      I believe a war between the Unions and the Taxpayers will begin in a few years when pay-go is just around the corner. At that point there will either be MASSIVE tax increases (to pay the $10 Billion outgo each year) or pension reductions.

      I believe the politicians (with any brains) will switch sides a year or 2 before that, supporting a pension freeze and or VERY material 50+ cuts in the pension accrual rate for future service. It will be WAY to late for employee contribution increases to address the shortfall.

      Reply

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