I Used To Be That Dumb (But Not Quite So Dumb) 12-001

[Andy the Actuary]

I was reminded of an incident some thirty-five years ago where an actuarial student confronted with doing a benefit calculation for a salaried union employee asked how to determine the hourly rate. I advised to look to the plan document and if silent, look to past benefit calculations for a precedent, and if there were none, we would contact the Plan Administrator about adopting an administrative procedure or amending the plan. Meanwhile, I advised, simply divide the annual pay by the total number of hours.

The actuarial student returned a bit later and had taken the annual pay and divided it by 365 and then by 24 hours. "How many union employees do you know," I asked, "who work 24 hours a day year round?" The student replied, "I don't know any union employees." Shortly thereafter the student left the profession to pursue other interests.

[Guest alex1245]

i know this has to be a little funny. but i didn't understand it.

[Mike Preston]

It was a lot funny. Alex, read it again then ask yourself: "How many people do you know that work 24 hours in a day?".

[GMK]

Shortly thereafter the student left the profession to pursue other interests.

You may have gotten technical advice about your cell phone contract from him.

Yes, it was a lot funny.

[four01kman]

Not only funny (certainly to those of us of a certain age), but it proves the maxim that there is a difference between "book learing" and "street smarts".

[Andy the Actuary]

I believe the student once went into a confectionary and asked the proprietor how much did the candy stitting atop the counter in glass jars cost. The proprietor told the student, "You can have all you want for a dollar." The student thought a moment and then siad, "I'll take two dollars' worth."