The Story of Michael
Michael is an Enrolled Actuary and an MSPA. One day, Michael receives a phone call from a local divorce attorney. The attorney is looking for an actuary to value retirement benefits in a divorce action. Currently, Michael limits his practice to certifications on Schedules MB and SB, PBGC Form 1 premium calculations and PBGC Form 500 schedule EA-S, standard plan terminations. Michael was thinking of branching out into other fields of actuarial practice, so this assignment is ideal.
Michael calls his friend Steve, another MSPA, to find out how he can accomplish his goal. Steve tells Michael that he may think he is qualified to value a benefit under a retirement plan, but first he has to review the requirements under the U.S. Qualification Standards. Steve explains that the Qualification Standards exempt Enrolled Actuaries from the continuing education requirements if the Enrolled Actuary limits his practice to certifications on Schedules MB or SB or other government-required forms.
Steve goes on to say that taking on issuing one Statement of Actuarial Opinion (SAO) that does not fall within the Enrolled Actuary exemption means that Michael must now meet the continuing education of the Qualification Standards. Michael asks, “How hard is it to meet the continuing education of the Qualification Standards?” Steve explains that Michael needs 30 relevant continuing education hours, 6 hours of which must include organized activities and 3 hours must be for professionalism. All in the prior year!
Michael starts thinking about the continuing education credits he earned last year. He went to an ACOPA conference and received 11 credit hours of continuing education that included 1 hour on professionalism. He still needs 19 hours of continuing education that include 2 hours on professionalism. Michael is really bummed; it seems he cannot accept this assignment. He has to wait until next year to do anything other than what he is doing now.
Steve gives Michael an idea: “Why don’t you call the Actuarial Board for Counseling and Discipline? You can speak to a board member and see if there is an alternative.”
Michael calls the Actuarial Board for Counseling and Discipline (ABCD) and reaches Allen, a pension actuary and a member of the ABCD. Allen tells Michael that the ABCD considers the phone conversation a Request for Guidance (RFG). The ground rules for RFGs is that the advice Allen provides is Allen’s own opinion and not a determination by the ABCD. Further, Allen will write up a short summary of the conversation that will be distributed to the other members of the ABCD. Otherwise, the conversation will be kept confidential. Michael agrees to the ground rules.
Michael lays out his problem. After a few minutes to ponder Michael’s dilemma, Allen suggests they read the Qualification Standards together to see if there is a solution. Allen points Michael to section 2.2.2 and especially the last two sentences: “However, if the 30-hour requirement is not met in the year before an actuary issues a Statement of Actuarial Opinion, the shortfall can be earned in the same year, if earned prior to issuing the SAO. The hours earned to satisfy the shortfall cannot be applied to satisfy the continuing education requirement for the current year.” Michael starts thinking about what credits he has this year. Alas! Michael has not attended a conference yet so he still does not meet Qualification Standards’ continuing education requirements.
Allen asks Michael if he participates in the ACOPA listserv. Michael responds, “Yes, I spend an hour a day reading and responding to questions.” “Perfect,” Allen replies. “If you maintained a contemporaneous log on the time you spent reading and answering questions, then that time spent on the listserv is considered relevant continuing education.” “Wow!” Michael exclaims, “I earn 30 hours of relevant continuing education a month!” Allen reminds Michael that the 2 hours on professionalism can be met participating in the listserv if the questions raised relate to professionalism subjects. Michael knows many questions on the listserv relate to professionalism issues rather than interpretations of the Internal Revenue Code. Allen reminds Michael that discussions on soccer should not be considered relevant continuing education.
Michael’s continuing education problems are solved with one telephone call to the ABCD.
Michael thanks Allen for his advice and time. Then Michael calls the attorney to get the particulars on the case.
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