The Value of Professionalism Resources

Robert Reitz

The actuarial profession maintains a unique service for its members – actuaries are encouraged to submit Request For Guidance’s (RFGs). Actuaries facing difficult or unusual professional situations can confidentially call a member of the Actuarial Board for Counseling and Discipline (ABCD) and ask for advice. The actuary will describe the situation and explain why it poses a difficult issue for them. The ABCD member then typically asks questions on how the actuary believes the Code of Professional Conduct, Actuarial Standards of Practice and/or the Qualification Standards do or don’t apply to the situation. The ABCD member provides their personal opinion, but that member’s opinion does not bind the entire ABCD.

Let’s look at this from a different point of view: the ABCD investigates and adjudicates complaints against actuaries and can recommend discipline when it decides an actuary has materially violated one of the preceding standards. Yet an actuary who is concerned that their decision in a complex, conflicting or confusing situation could result in a complaint against them, is urged to contact the exact people who would investigate and adjudicate that complaint!

I faced such a situation early in my career as a pension actuary. My largest client called to tell me they were spinning off a very large subsidiary, and proposed to allocate the excess assets in an unusual manner. The pension plan was very well funded, and the spun-off company received assets somewhat beyond the statutory requirement. However, the residual assets in the parent plan were sufficient to fund all benefits earned to date by the remaining participants, PLUS all benefits to be earned by them in the future. Thus, the parent company could provide pensions to their employees, yet never have to contribute to the plan again.

Some early pension plan spinoffs were controversial and criticized as abusive, and I was concerned that this spinoff could somehow have a similar result. I checked with peers who gave me differing opinions, but one of them suggested I call the ABCD and request guidance. This was early in the ABCD’s existence and its members were all very distinguished actuaries. I called with some trepidation, wondering if the call would result in a complaint against me. (It never does, but I didn’t know that then.)

The call went well, the advice I received was very instructive, and the spinoff proceeded without incident. I’m retired now, but I still remember how helpful that call was. I responded to many RFGs during my six years on the ABCD, and tried to provide the same level of guidance to the requesting actuary that I had experienced many years earlier.

This valuable service continues to prosper as the number of RFGs increases every year. Over 100 actuaries have contacted the ABCD for an RFG in each of the last three years, proof that actuaries value this unique service provided by their profession.

May, 2019

Robert J. Rietz

Former President,

Conference of Consulting Actuaries

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