So you say you are an actuary....prove it!

[Guest dubya]

A business owner (friend) passed a name of a CLU along to me who he has been working with recently. They were talking investments and such and the focus later became looking at implementing a possible DB plan for the company. The CLU has told the owner that he is in fact an enrolled actuary and has offered his advice on some plan design issues. The owner asked me (a non-actuary, for sure) if I had ever heard of the CLU/actuary before and I haven't. I also don't think I should drop his name (yet) in this context.

Is there a central place where all approved, certified actuaries in the country are listed? Can I call or look up on the web such a list? Would I need an actuary number to even begun seaching for him? I have the phone number to the JBEA, but would that be inclusive of all actuaries, or would I have to obtain a list of all actuarial organizations and try to sort this out with them one at a time? Per the owner, he refers to himself as an "enrolled actuary" and uses the EA moniker.

The owner was somewhat comfortable with the CLU on investment advice but is getting a little suspicous when the talk turned to plan design and the CLU insists that he can do it all (ie, doesn't want anyone else involved). I'm a little curious myself now as well.

[WDIK]

You might start here.

[david rigby]

That is the correct location for a search. However, there may be some EA's with no other actuarial certification or affiliation who are not listed on the Actuarial Directory.

[AndyH]

And don't forget that the guy could be calling himself an EA which also means Enrolled Agent. I've seen people get confused over that before.

[Effen]

What a COOL site. I never knew it existed. Now I don't have to seach the office for "the book".

I feel like Steve Martin in "the Jerk" - WOW, I'm really somebody!

[Blinky the 3-eyed Fish]

Pax, what enrolled actuaries are not listed on this site? I thought it included all EA's.

Andy, yeah, it was me who confused someone else calling themselves an EA who was an enrolled agent.

Effen, welcome to the club.

Dubya, I am curious as to what you find.

[AndyH]

There is not a single Effen actuary on the list.

(I could not resist on a Friday afternoon preceding vacation).

[Effen]

That's strange.... then why do I keep hearing about the all the effen actuaries?

.

[Guest dubya]

I worried about the EA confusion between enrolled agent and enrolled actuary. However, the CLU specifically referred to himself as an enrolled actuary.

I had to leave a message with the JBEA office so I will follow up there next week. The website per WDIK is good, but if it is not all inclusive, and his name doesn't show up (which it did not), I'll still have a doubt.

[david rigby]

You could always ask to see his Enrollment Certificate. Better yet, ask to see his letter from the JBEA notifying him that his enrollment status has been renewed. The most recent one should be dated in March (approx) of 2002.

Blinky, it may be that all EA's are listed, but since there are some without other affiliation, I don't know how they are reported, or who would do so. Remember that the Actuarial Directory was orginally a compilation of all members of the various actuarial organinzations. Some EA's still don't have an affiliation (unfortunately).

[Blinky the 3-eyed Fish]

I didn't know the origins of the directory. Even without an organization, the JBEA could be reporting to the list. I know that before I joined ASPA as an MSPA, I was on the list, so that's why I think it may be all inclusive. Of course I could be wrong.

I think prison time is deserved if he is impersonating an actuary.

[Guest Gregory]

Blinky...What is prison time for an actuary? A good EA would simply plea it down, based on mortality and adverse selection, to parole. Had to ask

[Kirk Maldonado]

Blinky:

I agree that someone impersonating an actuary should be confined. But I don't think it should be a prison. An insane asylum would be more appropriate.

Pax:

For those of us non-actuaries, how often do EAs (enrolled actuaries, not enrolled agents) have to renew their enrollment certificate?

[Blinky the 3-eyed Fish]

Ah, but he's not an actuary, and therefore subject to the laws of the land, without room for leniency.

Kirk, can I say the same thing about lawyers? BTW, it's every 3 years.

To further share the apparent allure of being an actuary, I once heard a story of someone who had ACTUARY as their personalized license plate. Of course, you guessed it, the person was not an actuary.

[SoCalActuary]

The list is not inclusive. It does not show all actuaries I know.

[Blinky the 3-eyed Fish]

Maybe they are not actuaries and have been fooling you all these years. How well do you really know them? I would contact the FBI.

Either that or pax is correct. Take your pick.

[SoCalActuary]

Some people are not joiners! Frankly, the costs of membership don't always give a good value for the benefits obtained.

The CLU (who might be an actuary?) should have some kind of public recognition. Do you know other people in his community who have worked with him in the past? Ask around in his community for references. Eventually, if that does not prove satisfactory, you could have someone contact the person directly.

Of the many actuaries I have worked with, some as clients or customers, some as fellow employees, some as competitors, I am not surprised that the (maybe) actuary could be uncomfortable on some aspects of plan design. Passing the exams to get in the business is no guarantee that you are good at it. My 30+ years tell me that you have to keep working at it to stay current on plan design. I have seen a few who passed the early EA exams who have no business representing themselves as competent. In fact, one of them is a CLU as well.

If you suspect that misrepresentation is involved, your best choice is to go to the JBEA or the Academy's ABCD, who I have found helpful in the past.

[flosfur]

I worried about the EA confusion between enrolled agent and enrolled actuary.  However, the CLU specifically referred to himself as an enrolled actuary.

I had to leave a message with the JBEA office so I will follow up there next week.  The website per WDIK is good, but if it is not all inclusive, and his name doesn't show up (which it did not), I'll still have a doubt.

There is a separate directory of Enrolled Actuaries available from the Academy of Actuaries for $75 or so. The directory is not updated every year.

I bought a copy of the latest edition. If you don't get a response from the JBEA, send me an email thru the forum and I will look up the name for you.

[flosfur]

You could always ask to see his Enrollment Certificate.  Better yet, ask to see his letter from the JBEA notifying him that his enrollment status has been renewed.  The most recent one should be dated in March (approx) of 2002.

Blinky, it may be that all EA's are listed, but since there are some without other affiliation, I don't know how they are reported, or who would do so.  Remember that the Actuarial Directory was orginally a compilation of all members of the various actuarial organinzations.  Some EA's still don't have an affiliation (unfortunately).

Yes - (up to the last edition), the Academy's directory only includes the actuaries who belong to one of the actuarial organizations in USA, Canadian Institute of Actuaries & Colegio Nacional de Actuaries (Mexico).

Another point, a person may be an actuary and on the directory but not an Enrolled Actuary.

----------------------------------

What about the misleading practice of some TPAs (some ASPA members) who have no actuaries (enrolled or otherwise) on staff using "Administrators & Actuaries" on their letterhead?

And there was one person, though knowledgeable about the actuarial concepts but neither an ASA nor an EA, claimed to be an EA and worked for a plan sponsor as the in-house pension actuary. The impostering came to light when, in a law suite against the sponsor, the plaintiff's lawyer made a call to JBEA. Except for losing the job, there was no other consequences.

And now, the same person's letterhead says "Administrators & Actuaries".

[david rigby]

http://www.irs.gov/pub/irs-pdf/pcir230.pdf

[Guest dsyrett]

"To further share the apparent allure of being an actuary, I once heard a story of someone who had ACTUARY as their personalized license plate. Of course, you guessed it, the person was not an actuary. "

Couldn't have been me cause I've got one and I am (in Virginia)

[david rigby]

However, I'm sure the JBEA would confirm a person's enrolled status - but come to think, maybe not.

From the Joint Board website:

http://www.irs.gov/taxpros/actuaries/artic...0.html#standing

[Guest flogger]

Apparently anyone can practice being another actuary without repercussions. A couple of years ago a TPA contacted me (an Enrolled Actuary) because they were taking over a case for which the prior year's Sch B had my signature on it. They were confounded by the numbers on the B. I had no record of this case, so I had them fax me the Sch B to which they were referring. That Sch B contained a bunch of really wild numbers that were all over the place, and the signature on it was my name, but not my signature. So I tracked down the prior TPA (I don't do TPA work, just Sch B's), and talked to the insurance agent (who had no credentials outside of insurance licenses, and I'm not even sure about that). The insurance guy admitted to having signed my name and putting down a bunch of numbers. His rationale for all this was simultaneously insulting, violating and amusing. (You really don't want to hear it.)

So I contacted an attorney at Reish Luftman to see what could be done in the way of criminal and/or civil proceedings. He answered that nothing could be done--that there was no law or statue that allowed for any kind of prosecution!!!

[AndyH]

Now, watch for a flurry of Schedule B's signed "flogger" 9/2/2004.

[Guest flogger]

Perhaps the best reason yet for a pseudonym.

[Archimage]

Flogger, I disagree. I want to hear it.

[Guest flogger]

Well, this may take a few postings to explain the entire story. First, let me say that this insurance agent who sidelines as a TPA was a close family friend prior to this discovery. He was extremely helpful during a very horrible time in my family's life when we lost a brother due to leukemia. I mention this only as an explanation as to why I haven't really pushed the issue.

However, this discover of forging my signature on a Sch B wasn't limited to one Sch B. (A man who is caught cheating generally has a history of cheating.)

Here's an paraphrase of his explanation:

"I was in a real bind. The client had requested a copy of the forms and I hadn't done them. It was well beyond the deadline and it was a 'no-file' case (to be explained below) anyway. So I signed your name to it, but not to worry because the IRS never received the documents anyway. I'll pay you for it, and I owe you some money for a few others I did like that. But don't worry, I'm starting to do these clients' tax returns, both personal and corporate, as it's really the only way to really control the client." (Needless to say, Bill has no accounting credentials either.)

For those of you wondering what a "no-file" case is, it's plan admin that is generallly completed, including the 5500 forms, but never sent to the IRS (therefore, the deadline is really immaterial). As Bill further explained, if you never file the forms, the IRS doesn't have anything to audit and apparently there is no cross referencing going on between 1120's 1040's and 5500's. Now I also learned from Bill that this is not the only type of admin that he does. He also does "admin upon audit", which is when he does no work at all until the plan is notified of an audit. At that time, all the necessary paperwork is put together for the examiner and he represents that it was all sent in timely.

First, I refused to accept any money, and had a few words with him. But talking to a psychopath is the same as talking to a wall. End of part 1. Any questions?

[Belgarath]

Fascinating! Horrifying, but fascinating. I can't wait for the next installment. Tell me, is he going to look good in his prison uniform? "But he that filches from me my good name, Robs me of that which not enriches him, And makes me poor indeed."

Edited - I couldn't remember the exact lines, so I paraphrased earlier.

[Lame Duck]

Is this like The Perils of Pauline where we end each episode with a cliffhanger? I'm waiting for part 2 also.

[david rigby]

"Waiting for part 2" is not strong enough. I am very concerned that anyone would impersonate an actuary, even if only on paper (is that an oxymoron?). As far as I am concerned, this constitutes fraud, and should not go unchallenged. My profession's (as well as my own) integrity is at stake.

I would be interested in hearing views of others, especially as to whether there is any course of action with "teeth".

[MGB]

I have no idea what this "agent" is doing (how many "consultants" are out there like this????), but I don't like it a bit. Don't they make movies of the week out of these types of financial "helpers"?

Sorry, I don't know how to handle such a person legally.

Actually, I thought I'd throw in another story (mid-season replacement while we wait for next season's continuation of the prior story).

I worked for an insurance company in the early years. Although I wasn't there when this happened (it happened a few years earlier), the story was frightening even years later.

No one at the company was a true pension actuary (this was before my boss and I were hired). When ERISA passed, you could become one of the initial Enrolled Actuaries in 1976 (around 1800 got in this way - most have since retired) by listing some experience somewhat related to pensions and answering some questions (kind of like a test, but much easier). This company had an actuary that had once worked for awhile in the group annuity department and was able to get his EA status in this initial group. However, he never worked with pensions going forward (he was actually a VP of marketing when this occurred), he just signed the Schedule B's for the insurance company's clients because they didn't have a true pension actuary.

Because of his actual duties, he had to travel around the world (this was a very big international conglomerate insurance company). In order to get the Schedule B's signed while he was away, he just signed a stack of them that the administration department could use (he was never the one that entered any of the other information anyway).

Well, of course, Murphy's law applied and obviously someone didn't understand the concept of a pre-signed form. Instead of filling in the rest of the Schedule B, they filed a bunch of them with the associated 5500s with only the signature.

Needless to say, the IRS and Joint Board were not pleased. But then, this guy was actually and EA so there could be sanctions. If he had been faking his being an actuary, maybe nothing could have been done.

P.S., I have heard Pippens and Holland say that they continually see Schedule B's signed by people that put into the EA number "applied for", or "studying to be one", and similar things like that.

[Blinky the 3-eyed Fish]

I have found that my greater concern is people with enrollment numbers who are impersonating an actuary. You should see the crap on plans I take over. I think too many actuaries know that even if the plan is audited that the auditor is incapable of checking actuarial calculations. I suppose it's only in cases where the funding number is WAY to high or low that an actual IRS actuary will check the valuation calculations.

[Guest flogger]

Within a few months of this incident (see above post from me), I got a call from an accountant who asked me to review one his client's 419(f)(6) Plans. He had only limited paperwork, but it included an ANNUITY with a $2MM single premium. The agent on the case, you guessed it, was Bill.

I thought I had mentally distanced myself from this guy and really wanted nothing to do with him. I'm not vengeful and my internal conflict was due to the episode of my brother dying and the important roll Bill once played in our lives. But he had now been out of my life, I had put the forging incident behind me (as there was nothing I could do anyway) and I wanted to work on real (legit) cases.

I met with the accountant who was worried about this 419 Plan he had "blessed". He, the accountant, had explained that Bill told him this 419 could be discriminatory and deductible. A variable annuity was purchased under the guise of a 419 Plan for which the accountant actually took a deduction of $2MM on the corporate return! (Those not familiar with 419's should know first that there are very few of these plans that actually MIGHT work, and that this needs to be life insurance and that the purchase of an annuity and calling it a 419 Plan is nothing but a sham--and the accountant never did his homework.)

The accountant, as I later understand, got some really nice fees from Bill for his consulting efforts on this case. (How I learned that was through heresay from an ex employee of the accountant, but I believe it now.) These annuities pay 8% commission, or in this case $160,000, and have some heavy termination charges during the first 7 years.

This accountant at least had a very small piece of a conscious to be worried about what had transpired. I assured him that his fears were well founded and explained to him how 419 were suppose to work and that what he had blessed was a sham. I charged him $500 for the half hour meeting hoping never to hear from him or Bill again. Never have been paid. And that's a good thing because he will never call me again.

The next day I got a call from Bill, but I didn't take it. He kept calling and I kept rejecting the call (having my secretary tell him I was rearranging my sock drawer). Finally he left me a voice mail: "How could you do that!? How could you tell the accountant that my 419 is no good? You know this is all a game and I can get anyone through an audit. They (IRS) are all a bunch of idiots--You just cost my client hundreds of thousands of dollars! " and on and on--I deleted it while it was still playing.

From the accountant's ex-employee I learned that they kept the annuity and decided to play "audit roulette".

There's still more to this story--you asked, so I'm telling you.

But I really think some of the prior messages are really on point. It is true that the non-actuary has NOTHING at risk. If this were an actuary or other credentialed professional, there would be recourse. But there was/is nothing I could do about Bill other than damage his reputation and earnings power from afar. I wasn't in the frame of mind to go after him. I felt like a divorcee who wanted to get on with life rather than go after the ex.

I've had one other bump-in with Bill since. This one involved 412(i)--I'm certain at this point that is no surprise to anyone as we all know 412(i)'s were and are ripe for abuse.

My story is really getting off point of this thread--

[Archimage]

Very interesting. Please post the next chapter.

[Earl]

I want to hear the story about how the insurance carrier treated Bill like a hero for placing the annuity.

[Belgarath]

I'm not an attorney, but I must say I find it hard to believe that this isn't somehow involving criminal action. Forging somebody's name on a document has to be illegal somehow. Any of you attornies have an opinion on this? Did you contact the District Attorney? Or maybe the NASD/SEC could spike his wheels if he's playing any games with variable annuities?

I admire your forbearance, but if he does it with you, who knows what other illegalities and fraud he is perpetrating? Seems like he ought to be stopped...

[Guest flogger]

Here's my final piece of the "Bill" story.

In addition to being an EA/MSPA, I also have some insurance licenses (Life/Dis/Series 6/63). I have these licenses only for consulting credibility for Non-Qual plans. I was invited to give a proposal for a company that wanted to revamp their entire benefits package for all employees. My proposal consisted of a combination of DB/DC and Non Qual plan for a few of the top execs.

I arrived at the client only to learn that my presentation would be one of two, and that the other proposer would be there too. Never before had I been in a situation where I was present during my competition's presentation, he would be there during mine, and the entire board and officers were also present.

The client was a company run entirely by othodox jews. I walked into the conference room and noticed that there were about 10 others there, all wearing yamicas. Then in walks my competition, Bill.

Now I know that Bill, like me, is about as WASP as they come. But Bill was wearing a yamica. I just thought to myself that this was going to be very interesting.

Bill gave his presentation first. He offered only a 412(i) plan that had huge premiums for the owners, hardly anything for rank and file employees, and other provisions, none of which would pass non-discrimination testing. He was very uncomfortable with the yamica sliding all over the place. I was having great fun watching this.

Next, I presented, with no direct comment at Bill's "inaccuracies", but certainly enough information to let them know Bill had overlooked a few important details. What was really an interesting twist was that after my presentation, they ask Bill to critique my ideas, and then I got to comment on Bill's. Bill couldn't criticize me other than to say my suggestions included spending way to much on rank and file. My comments were short concerning Bill's presentation, as I really believe he spoke for himself and that they could see right through his yamica. I did point out the problems with 412(i) (what good is a large deduction when you can get the same thing for a lot less), the problems with excluding most the rank and file, etc etc.

I was almost done with my critique when the chairman of the board stood up in a way that demanded silence in the room. After a very pregnant pause, he proclaimed: "We're going with the gentile!"

Bill excused himself and I haven't seen him since.

[Blinky the 3-eyed Fish]

That has to be the feel good story of the year.

[Earl]

All together: Ru-dy! Ru-dy! Ru-dy!

[david rigby]

Sorry to be so paranoid, especially on a Friday, but this is not good enough. The end result of flogger's story is probably that "Bill" is avoiding him. That is a far cry from cleaning up his act, and even further from being held responsible for fraud.

Would any of our contributing attorneys or accountants want to let this go if the person were impersonating one of their profession (perhaps he has done that as well)? I doubt it.

I still look for action.

BTW, the phonetic pronunciation is (approximately) as given by flogger, but the spelling is "yarmulke".

[AndyH]

The 412(i) part ties it all together neatly.

[Guest flogger]

Let me say that I have looked at this long and hard--esp with respect to my fellow practitioners. As I mentioned in an earlier post, I did contact an atty to see what I could do after the initial forging incident.

Another concern is dealing with the insurance commissioner's office. It's the wolves in charge of the hen house--much like the way attorneys regulate attorneys. I could be spending a lot of my time and effort for what will probably be no result. Eliminating Bill from the scene my get rid of one of these predators, but only one. The insurance license is easier to obtain than passing a urine test--and once it is passed, one suddenly becomes an "expert. One would think that the insurance industry would be best served by properly regulating itself. But like attorneys (and I do mean some disrespect to MANY attorneys) it is strickly a $'s game and a good ol' boys club.

Bill is at the end of his working life, and my guess is that he has made a lot of money and any potential sanctions, even the harshest, will not phase him. This problem is systemic and reflective of our laws and enforcement ability. Going after Bill is not the answer.

[SoCalActuary]

I wonder if your "Bill" is the same one I encountered. It was about a decade ago, and Bill had also helped perpetrate a fraud on a pension fund by pushing for a private placement loan that never got repaid. I also suggested the client sue for malpractice, which would have been easy to win, but they were already paying too much in attorney fees.

At that time, we also uncovered years of plan administration without discrimination testing, bad distribution amounts, a forged Sched B where distributions were supposedly taken and then reinstated back into the plan. Naturally, as soon as we started work, the IRS hit the client with an audit.

Later, one of my clients left over personality clashes (we didn't jump fast enough), and I suggested some firms he could work with. Instead, he chose Bill, over my strenuous objections. While I warned them, they didn't care because someone else they knew endorsed Bill.

[Guest dsyrett]

I had an interesting experience a year or so ago along these lines. Took over a small DB plan that had some problems. Cleaned them up as best I could.

Got a call from an FBI agent. Seems they were investigating the prior actuary for signing Schedule Bs for a plan where the TPA was taking money from the plan. FBI said that the actuary enabled the ruse to continue over a number of years by not raising a red flag. I'm not sure the actuary knew what was going on. Actuary plea bargained the charge.

I was to be a witness, to comment on my observations on the problems in the plan that I had taken over.

[SoCalActuary]

Wow! Did the actuary get suspended or barred from practice? A Felony conviction on the record?

I work on lots of plans where I don't do the trust accounting, but rely on others to supply it. Now there's something more to wory over.