An enrolled actuary is an individual who has satisfied established standards and qualifications and who has been approved to perform the actuarial services required under the Employee Retirement Income Security Act of 1974 (ERISA). These services include the application of the principles of probability and compound interest to determine the present value of payments to be made after certain specified conditions are fulfilled or certain specified events have occurred.
The Joint Board for the Enrollment of Actuaries is responsible for the enrollment of those seeking to become enrolled actuaries. The executive director of the Joint Board is responsible for administering the enrolled actuary program and for conducting disciplinary proceedings.
In order to become an enrolled actuary, a candidate must fulfill certain knowledge and experience requirements. The Joint Board for the Enrollment of Actuaries administers two actuarial examinations, and both must be successfully completed by individuals to satisfy the actuarial knowledge requirement for the designation of enrolled actuary. The basic (EA-1) examination tests knowledge of the mathematics of compound interest and practical financial analysis and the mathematics of life contingencies and practical demographic analysis. The pension (EA-2) examination, which consists of two segments, tests in Segment A the selection of actuarial assumptions, actuarial cost methods, and the calculation of minimum required and maximum deductible contributions, and in Segment B, knowledge of relevant federal pension laws (in particular, the provisions of the Employee Retirement Income Security Act and related laws, regulations, and rulings) as they affect pension actuarial practice.
A candidate for enrollment may be able to satisfy part of the actuarial knowledge requirement of the Joint Board regulations by earning a degree in actuarial mathematics or its equivalent from an accredited college or university.
The actuarial knowledge requirement for enrollment is augmented by a requirement that a candidate have certain responsible pension actuarial experience. Through a combined knowledge and experience requirement, the Joint Board seeks to determine which applicants for the designation of enrolled actuary have the skills necessary to protect the interests of pension plan participants.
After a candidate achieves the enrolled actuary designation, he or she may be subject to disciplinary action for three general types of misconduct, including the following: misconduct during the performance of actuarial services under ERISA; misconduct related to the enrolled actuary's federal income tax return; and misconduct unrelated to the performance of actuarial services under ERISA. An individual may file a complaint against an enrolled actuary directly with the Joint Board, and the complaint should contain, at a minimum, the enrolled actuary's name, address, telephone number, and enrollment number. In addition, the complaint should include a detailed description of the allegations and any supporting documentation.
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