Change of Enrolled Actuary

[david rigby]

Plan sponsor "relieves me of my duties", and hires firm X that happens to employ at least one Enrolled Actuary. Although annoying, it was not a surprise, and we move on.

The sponsor decides not to pay my modest fee for completing the Schedule B, and X says, "we'll do it". Note that X's EA did not say that, but the EA's non-actuary boss. It is beyond consideration (in this case) that X will recalculate the items to be placed on the Schedule B. Many are available in my report, but a few can only be approximated (the actuarial term for "guess"). Let's assume I know this EA will not do any such recalculation.

Do any of you EA's see a problem, within the Code of Conduct, or something that should be brought to the attention of the ABCD? Any action suggested? Get over it?

[SoCalActuary]

Not paying your fee - that's worth getting even. Insist that all work product be returned. The new EA cannot use your work product. To do otherwise is to steal your property. Make a copy for the Joint Board, and consider sending it. Maybe consider having your attorney send the letter to the client.

[david rigby]

Oops, I should rephrase for clarity. I should have said the sponsor did not want me to do the Sch.B (because I wanted a fee). Therefore, X volunteered to do it.

[Effen]

You aren't talking about me are you? I recently took over a plan from a national firm that prepared and was paid for the 2003 valuation. We did the 2004 valuation. The prior actuary wanted $3K more to do the 2003 Sch. B. We agreed to do it for a lower cost. We had matched the 2003 valuation as part of our takeover, so I was fairly comfortable signing the Sch. B. I did however use my numbers, not the prior actuary.

I hear what you’re saying. The shoe has been on the other foot before, but we usually do the Sch. B for a valuation we prepared, assuming that we were paid. If you haven’t been paid for the valuation, you don’t have any obligation to sign the Sch. B. Also, just because you did the valuation, doesn't mean that the new actuary can't redo it. Nothing is really final until the Sch. B is filed.

Although you "know" the new actuary is using your numbers, it could be that he “matched” your numbers. Once he signs the Sch. B, they are his numbers and really none of your concern. Getting paid for work you did is certainly something I would continue to pursue, but short of an ethical client, they have no reason to pay you.

If you know he stole your work, then you might want to contact ABCD, but it is possible he just redid your work and came up with the same values.

[Blinky the 3-eyed Fish]

Effen makes a lot of sense. There is no way for you to distinguish if the new actuary matched your numbers or used your numbers. Even if you "know" he just used your numbers, you will be the only one who will ever "know" this.

A related question though. Sometimes I take over plans where the prior actuary's work was less than correct. It of course varies by the situation. Sometimes I have seen small errors, like no 412(m) charges calculated, when they clearly apply. Other times, I have seen fraudulent numbers, like the NC being the same made up figure for multiple years. Has anyone ever contacted anyone to report a crappy actuary? If so, what was the result?