{"id":37,"date":"2015-02-17T09:20:00","date_gmt":"2015-02-17T15:20:00","guid":{"rendered":"http:\/\/admin.patheos.com\/blogs\/janetheactuary\/2015\/02\/from-a-reader-a-question-for-my-fellow-actuaries-updated.html"},"modified":"2015-02-24T21:13:49","modified_gmt":"2015-02-25T03:13:49","slug":"from-a-reader-a-question-for-my-fellow-actuaries-updated","status":"publish","type":"post","link":"https:\/\/www.patheos.com\/blogs\/janetheactuary\/2015\/02\/from-a-reader-a-question-for-my-fellow-actuaries-updated.html","title":{"rendered":"From a reader: a question for my fellow actuaries (updated)"},"content":{"rendered":"\n<\/head>

To be updated with my own reply later today, but I know I have other actuary-readers who might be willing to chime in \u00a0. . .<\/p>\n

I am a sophomore at Olivet Nazarene University in Bourbonnais and am triple majoring in actuarial science, mathematics, and accounting. As a student in the Honors Program, I will be conducting research on a topic of my choice. I am interested in pursuing pension consulting , but as a second year student, feel a little ill-equipped when brainstorming about a specific trajectory for my research. Is there anything that comes to mind?<\/p><\/blockquote>\n

My correspondent then mentions some possible topics but was hoping, in particular, for some ideas that would be connected to the actual work of a pension actuary.<\/p>\n

So:<\/p>\n

first of all, what research topic(s) can readers suggest?<\/p>\n

And, second, what do you think of the future of actuarial careers?<\/p>\n

UPDATE:<\/p>\n

This has sat long enough.<\/p>\n

My first thought: \u00a0did you see Megan McArdle\u2019s article on the future of journalism<\/a>? \u00a0She basically said, \u201cdon\u2019t try to get my job \u2014 because my career path was so unlikely and there are so few such jobs out there it\u2019s foolish to try.\u201d <\/p>\n

I\u2019m not going to say this, exactly, but you should know that even in my relatively short (17.5 years) career, defined benefit pension plans have gone from the norm for large employers, to very nearly only available for grandfathered groups, unions, and government workers. \u00a0I cannot stress enough how dramatic and how fast this change has been \u2014 and it seems that we, as pension consulting actuaries, are accelerating it by promoting lump sum offerings and annuity purchases for frozen benefits, putting ourselves out of business for short-term gains in consulting fees. \u00a0(I say this because I assume all pension consulting firms are doing the same thing, so I don\u2019t believe I\u2019m announcing the identify of my employer.)<\/p>\n

We are still hiring actuaries. \u00a0There are still companies who say they intend to keep their plans \u2014 maybe about 1\/4 of large employers, the last time I looked at the numbers \u2014 and the general belief is that everyone who wants to close their plans, has already done so, so that this 25% figure may be relatively stable. \u00a0But then again, all it takes is for new management to come in, at any given company, and closing a plan isn\u2019t an action which is ever un-done by reopening it later. <\/p>\n

But, of course, the number of actuaries needed to value and consult on the smaller number of DB plans is, well, smaller, especially since everyone is also using \u201coffshore\u201d or \u201cval center\u201d models to move the core valuation work to specialized, and lower-paid, teams (lower-paid either by being based in India, or by the fact that the work is done by \u201canalysts\u201d not on the actuarial student track, and only checked by qualified acturies). \u00a0Many of our actuarial students move on to consulting on Defined Contribution plans, or investment consulting, or other specializations, after gaining initial experience with pensions. <\/p>\n

On the other hand: \u00a0people still have to retire, and my belief is that the 401(k) plan is simply not a viable long-term replacement for pension plans. \u00a0Some of my colleagues acknowledge this, and there are efforts to develop an alternative, something that relieves the employer of risk that they\u2019re not willing to bear any longer, without placing everything on the employee.<\/p>\n

Alternatively, another option that may gain traction is an \u201ceverything old is new again\u201d annuity, though there\u2019s a huge distrust among the general public, and not without reason, as commission fees and anti-selection make them pretty pricey.<\/p>\n

So as far as research goes, I\u2019d focus on the future of retirement, starting with the\u00a0Society of Actuaries Post-Retirement Needs and Risks research project<\/a>, and see where it takes you. <\/p>\n<\/body><\/html>\n","protected":false},"excerpt":{"rendered":"

To be updated with my own reply later today, but I know I have other actuary-readers who might be willing to chime in \u00a0. . . I am a sophomore at Olivet Nazarene University in Bourbonnais and am triple majoring in actuarial science, mathematics, and accounting. As a student in the Honors Program, I will […]<\/p>\n","protected":false},"author":2209,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[23,24,25],"class_list":["post-37","post","type-post","status-publish","format-standard","hentry","category-uncategorized","tag-actuaries","tag-careers","tag-retirement"],"yoast_head":"\nFrom a reader: a question for my fellow actuaries (updated)<\/title>\n<meta name=\"description\" content=\"To be updated with my own reply later today, but I know I have other actuary-readers who might be willing to chime in  . . .I am a sophomore at\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.patheos.com\/blogs\/janetheactuary\/2015\/02\/from-a-reader-a-question-for-my-fellow-actuaries-updated.html\" \/>\n<meta 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