This is that time of year when we actuaries are calculating whether we have a sufficient number of hours of continuing education to remain credentialed and authorized to sign actuarial reports.\u00a0\u00a0Same as many professions, I suppose, but fairly new for us, as the requirements were first instituted\u00a0five years ago.\u00a0 <\/p>\n
The twist is that we need a\u00a0relatively small number of hours of formal credits, and are able to count various forms of self-study \u2014 from reading about a relevant topic to preparing conference materials or an article \u2014 for the remainder if we don\u2019t have enough hours of training sessions.\u00a0 We also have to have a minimum of three hours on \u201cprofessionalism\u201d topics \u2014 which means\u00a0subject matter such as Actuarial Standards of Practice (which define, in\u00a0broad terms,\u00a0professional obligations in matters such as the content of formal communications with clients, assumption-selection process, etc.,)and,\u00a0broadly speaking,\u00a0ethics topics.\u00a0 And this year I missed the two-hour ethics training session marathon, so I found myself trying to read ASOPs online last night to accrue credits.\u00a0\u00a0(Yes, December 31st has passed, but I\u2019m still OK as long as I\u2019ve managed this before I sign off on my first batch of actuarial results in the new year,\u00a0next week.)<\/p>\n
Now, in\u00a0my field, pension consulting, there are relatively few opportunities for ethical quandaries.\u00a0 Some time ago, there was an open question about whether valuation assumptions had to be \u201creasonable in the aggregate\u201d or \u201cindividually reasonable\u201d and there were some firms which were offering to clients the opportunity to tweak their assumptions in\u00a0a way that would pass auditor scrutiny and still minimize their liabilities as much as possible.\u00a0 At this point, most of this is fairly tightly prescribed, either by the government, when it comes to funding requirements, or by strict auditor scrutiny, for accounting.\u00a0 I don\u2019t really even see clients trying to push us to tweak the numbers to get a desired result.<\/p>\n
And the various \u201cethical\u201d aspects of pension accounting in the news \u2014 that is, the ethics of the persistent failure to fund pension plans fully and to overpromise benefits to keep the unions\u2019 endorsements \u2014 aren\u2019t really matters to do with ethics of pension actuaries but of plan sponsors<\/p>\n
So what we end up with is much more a matter of garden-variety business ethics.\u00a0 <\/p>\n
If you discover that you\u2019ve made a mistake, do you immediately send over new results to the client?\u00a0 Do you slip the correction into that next version of results that you were planning on sending anyway, and hope the client doesn\u2019t notice that there were more changes?\u00a0 Or, if the error is in some nonessential part of the report, do you just hope the client doesn\u2019t notice?\u00a0 If you\u2019re compiling results from others and sending them on, there\u2019s a lot of fuzziness in when you take the blame vs. let the client believe that it was the other actuary\u2019s mistake.\u00a0 <\/p>\n
Of course, this only pertains to little mistakes \u2014 the big ones, like\u00a0an error\u00a0in calculating a required funding contribution or PBGC premium, have big consequences and the firm has spent a great deal of time and effort developing consistent peer-review procedures to minimize the chances of these sorts of errors.\u00a0 Which produces a different set of \u201cethics\u201d questions:\u00a0 how simple does a calculation need to be to warrant sending it over to a client without chasing someone for a peer review?\u00a0 And, if asked to review, how thorough a review is needed in order to ethically tell your colleague, \u201cyes, I\u2019ve peer-reviewed your work\u201d?\u00a0 <\/p>\n
If some of your work is charged to the client on a fixed fee basis and other parts on a time-cost basis, how diligent are you about differentiating between the two?\u00a0\u00a0 Or \u2014 let\u2019s face it \u2014 a pretty common ethical question:\u00a0 if you\u2019re \u201clistening\u201d to a training session and simultaneously replying to e-mails, how do you record your time?<\/p>\n
So that\u2019s my world.\u00a0 Do you have similar requirements in yours?<\/p>\n<\/body><\/html>\n","protected":false},"excerpt":{"rendered":"
This is that time of year when we actuaries are calculating whether we have a sufficient number of hours of continuing education to remain credentialed and authorized to sign actuarial reports.\u00a0\u00a0Same as many professions, I suppose, but fairly new for us, as the requirements were first instituted\u00a0five years ago.\u00a0 The twist is that we need […]<\/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":[],"class_list":["post-675","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"yoast_head":"\n