Proposal Updates Eligibility to Provide Actuarial Services to ERISA Plans

September 18, 2009 (PLANSPONSOR.com) - The Joint Board for the Enrollment of Actuaries has released proposed amendments to the regulations governing the performance of actuarial services under the Employee Retirement Income Security Act (ERISA).

The proposed amendments would update the eligibility requirements for performing actuarial services for ERISA-covered employee pension benefit plans, including the continuing education requirements, and the standards for performing such actuarial services.   The proposed amendments would affect employee pension benefit plans and the actuaries providing actuarial services to those plans.

The Joint Board said it determined that the regulations need to be updated to reflect changes in the law and in industry practice.

No changes are made under the proposed regulations to the materials covered by either the basic actuarial examination or to the examination for pension actuarial knowledge, however, the rules would require that the pension actuarial examination must be completed within the ten-year period immediately preceding the date of application for initial enrollment.   The Joint Board said such a requirement is needed because of the frequent changes in pension law and a need for an enrolled actuary to have current knowledge of pension requirements.

With respect to qualifying experience, the proposed regulations would require that all actuarial and pension actuarial experience be certified in writing by individuals with knowledge of the individual's experience.   If the individual's supervisor is not an enrolled actuary, the pension actuarial experience must be certified by both the supervisor and an enrolled actuary with knowledge of the individual's pension experience.   As in the current regulations, the qualifying experience must have been completed within the last 10 years before the application for enrollment.

The proposed regulations also clarify existing provisions and add some new provisions regarding standards of professional responsibility and conflicts of interest.

To reflect changes made in the law made by the Pension Protection Act of 2006, the proposed regulations would provide that an enrolled actuary must exercise sufficient due care, diligence, skill, and prudence as is required to ensure that all actuarial assumptions are reasonable individually and in combination.   The proposed regulations would also require that all calculations not only be accurately carried out but also properly documented.