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Pension Actuary Fiduciary Question


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I am an enrolled actuary and I work as a pension actuary for a financial services company that acts as a custodian for plan assets. At this company when a plan spsonor makes a deposit the financial operations department notifies the actuary that a depsoit was received and then the actuary needs to submit instructions to the financial services operations people telling them to invest the funds per the plan spsonors investment directives on file. Our company has 4 days to turn this around per the service agreement. Ignoring the fact that executing financial transactions is a poor use of our time, my concern is that because the actuary has discretion on when to invest the funds that maybe it crosses the line into having "authority or control over plan assets" and the actuary becomes a fiduciary. That may be a stretch but I am a little uncomfortable and I would like to know what others think. Thanks.  

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 I'm not sure I see discretion here (or authority and control).  You have no discretion over how the funds are invested, the investments are made per the sponsors investment directive.  You also have no discretion over when the funds are invested since the service agreement gives you a 4 day turnaround between deposit and investment.  That is an administrative delay, not a judgment call by the actuary.

I agree this seems like a waste of time for an actuary.  

 

 

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the process was probably created by a committee - and either there was no actuary on the committee or the actuary missed the meeting the day this was decided.  So the actuary ended up with the monkey on his or her back.

I carry stuff uphill for others who get all the glory.

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"...and then the actuary needs to submit instructions to the financial services operations people telling them to invest the funds per the plan sponsor's investment directives on file."

Is there any chance that the process can be made more efficient by the financial services operations people just automatically following sponsor directions when a contribution comes in?  What possible catastrophic error is this silly procedure supposed to prevent?  Maybe shERPA has it right, and it was just a bunch of committee members choosing to stick it to a defenseless actuary.

How do they handle deposits to 401(k) plans if there is no enrolled actuary?  Or, for that matter, what do they do when the actuarial services are performed elsewhere and there is no actuary on staff responsible for any aspect of the plan?

Does the enrolled actuary have the authority to direct the financial services operations people to do anything other than to invest the funds per the plan sponsor's investment directives on file?  "Wait, don't do that!  I have a premonition that the market is going down 10% in the next few days.  Put it all into the money market fund!"  or, worse, "I got the horse right here, his name is Paul Revere!  [quoted from Fugue for Tinhorns, from Guys and Dolls] Put it all on Paul Revere!"

Always check with your actuary first!

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