[Federal Register Volume 64, Number 47 (Thursday, March 11, 1999)]
[Notices]
[Pages 12149-12150]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-5868]
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Notices
Federal Register
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This section of the FEDERAL REGISTER contains documents other than rules
or proposed rules that are applicable to the public. Notices of hearings
and investigations, committee meetings, agency decisions and rulings,
delegations of authority, filing of petitions and applications and agency
statements of organization and functions are examples of documents
appearing in this section.
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Federal Register / Vol. 64, No. 47 / Thursday, March 11, 1999 /
Notices
[[Page 12149]]
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JOINT BOARD FOR THE ENROLLMENT OF ACTUARIES
Restructuring of Enrolled Actuary Examinations
AGENCY: Joint Board for the Enrollment of Actuaries
ACTION: Notice.
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SUMMARY: This notice describes the proposal by the Joint Board for the
Enrollment of Actuaries (``Joint Board'') to restructure the
examinations it offers to those individuals seeking the status of
Enrolled Actuary (EA). It also provides notice of the Joint Board's
proposal for awarding transition credits to those individuals who have
completed, or will complete, part of the current enrollment examination
program before the spring of 2001, when the Board expects to begin
offering the new examinations. Finally, this notice provides interested
parties with an opportunity to comment on the proposals.
DATES: Written comments on these proposed changes to the enrollment
examinations or on the proposed transition credits are invited and must
be received on or before April 26, 1999.
ADDRESSES: Written comments should be submitted with a signed original
and three copies to the Office of the Director of Practice, Internal
Revenue Service, at the following address: Mr. Patrick W. McDonough,
Director of Practice, Internal Revenue Service, Office of Director of
Practice C:AP:DOP, 1111 Constitution Avenue, NW, Washington, D.C.
20224.
All submissions will be open to public inspection and copying in
room 1621, 1111 Constitution Avenue, NW, Washington, D.C. from 9 a.m.
to 4 p.m.
FOR FURTHER INFORMATION CONTACT: Paulette Tino, Joint Board for the
Enrollment of Actuaries, at (202) 622-7192, or Michael Roach, Joint
Board for the Enrollment of Actuaries, at (202) 622-3415.
SUPPLEMENTARY INFORMATION:
Background
The Joint Board was established by the Secretary of the Treasury
and by the Secretary of Labor under the authority of section 3041 of
the Employee Retirement Income Security Act of 1974 (ERISA). The Joint
Board is responsible for the enrollment of individuals who wish to
perform actuarial services under ERISA. Consistent with that mandate,
the Joint Board has promulgated regulations governing eligibility for
enrollment. Those regulations are published at 20 CFR Part 901. An
individual who wishes to be enrolled may satisfy the examination
requirements for enrollment by passing the examinations offered by the
Joint Board. At present the examinations leading to recognition as an
Enrolled Actuary consist of two examinations, one of which is in two
segments. The basic actuarial examination covers actuarial mathematics
and consists of two segments, namely, actuarial mathematics (EA-1A) and
pension actuarial mathematics (EA-1B). The pension law examination
covers ERISA and other relevant statutes and their application to
specific problems (EA-2). The last major revision of the format of the
enrollment examinations was in 1984.
Since the last revision of the enrollment examinations, the law and
regulations relating to pension plans have been amended many times. As
a result, the current format of the enrollment examinations no longer
provides the examiners with a sufficient opportunity to test the
candidate's knowledge of the relevant pension law and of actuarial
mathematics. The need to cover the types of actuarial problems arising
under current pension laws and the need to conform the Joint Board's
examination programs to recent developments in actuarial theory and
practice have led the Joint Board to conclude that its current
examination structure needs to be improved. The Board has determined
that a restructuring of its examinations will improve its ability to
determine whether those who seek enrollment have demonstrated
competence in both the law and the actuarial theory which is relevant
to the performance of pension actuarial services.
These matters were discussed by the Advisory Committee on Actuarial
Examinations and the public at a meeting held for that purpose on June
30, 1998. Further consideration has been given to these issues by the
Joint Board and by the co-sponsors of its examinations, the Society of
Actuaries and the American Society of Pension Actuaries. As a result of
these discussions, the Joint Board, the Society of Actuaries, and the
American Society of Pension Actuaries have agreed that a restructuring
of both the basic actuarial examination and the pension law examination
is needed for adequate testing of candidates for enrollment.
Executive Order 12866
Executive Order 12866 requires agencies to assess all costs and
benefits of available regulatory alternatives and, when regulation is
necessary, to select regulatory approaches that maximize net benefits
(including potential economic, environmental, public health and safety
effects; distributive impacts; and equity). Since no modification of
any regulation is contemplated in this Notice, Executive Order 12866
does not affect this notice.
Regulatory Flexibility Act, Unfunded Mandates Reform Act of 1995, and
Small Business Regulatory Enforcement Fairness Act of 1996
Because the changes to the examination program of the Joint Board
contemplated in this Notice do not require any change to existing
regulations, the statutes cited in the caption of this section do not
affect this Notice.
Drafting information. The principal author of this Notice is Ms.
Paulette Tino, Chair, Joint Board for the Enrollment of Actuaries.
Proposed Modification
The Joint Board for the Enrollment of Actuaries has under
consideration the restructuring of the examinations it offers under 20
CFR 901.13(d)(1). The need for restructuring is based on the expansion
of the body of law affecting the private pension system and the
corresponding increase in the complexity of the work for which enrolled
actuaries are responsible. The syllabus of the current law examination,
one of two examinations an individual must pass in order to meet the
knowledge requirement for enrollment,
[[Page 12150]]
does not provide sufficient opportunity to test a candidate's knowledge
of the relevant pension law. In addition, the pension mathematics
segment of the basic actuarial examination does not cover sufficient
material to test a candidate's ability to apply sound actuarial
techniques to the increasingly complex regulatory environment in which
defined benefit pension plans operate.
As a result of discussions held at a public meeting on June 30,
1998, and in other public forums, the Joint Board and the examination
co-sponsors, the Society of Actuaries and the American Society of
Pension Actuaries, propose to restructure the examination program.
The major topics for the restructured basic actuarial examination
would be (1) compound interest, and (2) life contingencies. These
topics are now covered in the first segment of the basic actuarial
examination (EA-1A). The restructured examination covering these topics
would be 2\1/2\ hours long, the same length as the current EA-1A
examination.
The restructured pension law examination would be offered in two
segments. The first would cover basic pension mathematics, including
the law and regulations that relate to funding qualified defined
benefit pension plans that are neither overfunded nor seriously
underfunded. The second segment would cover the remaining relevant law
and regulations. This would include treatment of overfunded plans,
deficit reduction contributions, qualification standards, etc. A
minimum standard of competence would be established for each segment.
Each segment of the restructured pension law examination would be 4
hours long.
It is the Joint Board's intention to offer each examination once a
year. The basic actuarial examination and the second segment of the
pension law examination would be offered in the spring. The first
segment of the pension law examination would be offered in the fall. It
is anticipated that the restructured program will take effect in the
spring of 2001 when the basic actuarial examination and the second
segment of the pension law examination will be offered.
Appropriate transition credits would be accorded to persons who
have successfully completed portions of the enrollment examination
before 2001. The Joint Board is considering the following system of
transition credits:
(1) A person who has successfully completed the first segment of
the current basic actuarial examination before 2001 will receive
credit for the restructured basic actuarial examination and will
satisfy the examination requirement of the Joint Board's regulations
only if he or she passes both segments of the restructured pension
law examination.
(2) A person who has successfully completed both segments of the
current basic actuarial examination before 2001 will receive credit
for the restructured basic actuarial examination and will satisfy
the examination requirement of the Joint Board's regulations only if
he or she passes both segments of the restructured pension law
examination.
(3) A person who has successfully completed the first segment of
the current basic actuarial examination and the current pension law
examination before 2001 will receive credit for the restructured
basic actuarial examination and for the second segment of the
restructured pension law examination and will satisfy the
examination requirement of the Joint Board's regulations only if he
or she passes the first segment of the restructured pension law
examination.
(4) A person who has successfully completed the second segment
of the current basic actuarial examination and the current pension
law examination before 2001 will receive credit for both segments of
the restructured pension law examination and will satisfy the
examination requirement of the Joint Board's regulations only if he
or she passes the restructured basic actuarial examination.
(5) A person who has successfully completed the current pension
law examination before 2001 will receive credit for the second
segment of the restructured pension law examination and will satisfy
the examination requirement of the Joint Board's regulations only if
he or she passes the restructured basic actuarial examination and
the first segment of the restructured pension law examination.
(6) A person who does not meet the requirements of one of the
preceding five paragraphs before 2001 will receive no credit for any
examinations passed under the current examination program and will
satisfy the examination requirement of the Joint Board's regulations
only if he or she passes the restructured basic actuarial
examination and both segments of the restructured pension law
examination.
The above restructuring is subject to approval by the respective
co-sponsors of the examination. This proposal is intended to reflect
the views expressed at the public meetings held by the Joint Board and
by the co-sponsoring organizations up to the present time. However, the
Joint Board welcomes further public comments on the restructuring.
Persons desiring to submit comments should submit them in writing on or
before April 26, 1999, to the address given above.
Examination candidates will be furnished with more details on the
restructuring after it has been approved.
Paulette Tino,
Chair, Joint Board for the Enrollment of Actuaries.
[FR Doc. 99-5868 Filed 3-10-99; 8:45 am]
BILLING CODE 4810-25-P
