[Federal Register Volume 76, Number 62 (Thursday, March 31, 2011)]
[Rules and Regulations]
[Pages 17762-17776]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-7573]



[[Page 17762]]

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JOINT BOARD FOR THE ENROLLMENT OF ACTUARIES

20 CFR Part 901

[TD 9517]
RIN 1545-BC82


Regulations Governing the Performance of Actuarial Services Under 
the Employee Retirement Income Security Act of 1974

AGENCY: Joint Board for the Enrollment of Actuaries.

ACTION: Final regulations.

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SUMMARY: This document contains final regulations under section 3042 of 
the Employee Retirement Income Security Act of 1974 (ERISA) relating to 
the enrollment of actuaries. These regulations update the eligibility 
requirements for performing actuarial services for ERISA-covered 
employee pension benefit plans, including the continuing professional 
education requirements, and the standards for performing such actuarial 
services. These regulations will affect employee pension benefit plans 
and the actuaries providing actuarial services to those plans.

DATES: Effective date: These regulations are effective on May 2, 2011.

FOR FURTHER INFORMATION CONTACT: Patrick McDonough, Executive Director, 
Joint Board for the Enrollment of Actuaries, at (202) 622-8229 (not a 
toll-free number).

SUPPLEMENTARY INFORMATION:

Paperwork Reduction Act

    The collections of information contained in these final regulations 
have been reviewed and approved by the Office of Management and Budget 
in accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
3507(d)) under control number 1545-0951.
    The collections of information in the regulations are in sections 
901.1(i), 901.1(j), 901.10, 901.11(d), 901.11(f)(2)(D), 901.11(f)(2)(G) 
and (H), 901.11(f)(3)(ii), 901.11(g)(3), 901.11(j)(1), 901.11(j)(2), 
901.11(k), 901.11(l)(4)(v), 901.12(e), and 901.54. These collections of 
information are required in order for the Joint Board to carry out its 
function under section 3042 of ERISA, which provides that the Joint 
Board shall, by regulations, establish reasonable standards and 
qualifications for persons performing actuarial services with respect 
to plans subject to ERISA and, upon application by any individual, 
shall enroll such individual if the Joint Board finds that such 
individual satisfies such standards and qualifications, and also 
provides that the Joint Board may, after notice and an opportunity for 
a hearing, suspend or terminate the enrollment of an individual who 
fails to discharge his duties under ERISA or who does not satisfy the 
requirements for enrollment.
    An agency may not conduct or sponsor, and a person is not required 
to respond to, a collection of information unless it displays a valid 
control number.

Background

    This document contains final regulations under section 3042 of the 
Employee Retirement Income Security Act of 1974 (88 Stat. 829), Public 
Law 93-406 (ERISA). Section 3042 of ERISA provides that the Joint Board 
for the Enrollment of Actuaries (Joint Board) shall, by regulations, 
establish reasonable standards and qualifications for persons 
performing actuarial services with respect to plans subject to ERISA 
and, upon application by any individual, shall enroll such individual 
if the Joint Board finds that such individual satisfies such standards 
and qualifications. Section 3042 also provides that the Joint Board 
may, after notice and an opportunity for a hearing, suspend or 
terminate the enrollment of an individual who fails to discharge his 
duties under ERISA or who does not satisfy the requirements for 
enrollment.
    Consistent with section 3042, the Joint Board has promulgated 
regulations at 20 CFR part 901, addressing eligibility for enrollment, 
requirements for continuing professional education of enrolled 
actuaries, professional standards for performance of actuarial services 
under ERISA, bases for disciplinary actions and the procedures to be 
followed in taking those actions. The Joint Board last issued 
comprehensive amendments to the regulations regarding section 3042 in 
1988 (53 FR 34484). In anticipation of amending the Joint Board 
regulations, the Joint Board issued a Request for Information (RFI) 
which was published in the Federal Register on June 30, 2004 (69 FR 
39376). On December 21, 2007, the Joint Board issued final regulations 
relating to user fees for the initial enrollment and reenrollment as an 
enrolled actuary in the Federal Register (72 FR 72606). On September 
21, 2009, the Joint Board issued proposed regulations under section 
3042 (74 FR 48030). Written public comments were received on the 
proposed regulations, and a public hearing was held on February 25, 
2010.

Explanation of Provisions

I. Overview

    These regulations finalize the rules proposed in REG-159704-03 
(published September 21, 2009), with certain modifications highlighted 
in this preamble.

II. Eligibility for Initial Enrollment

    These regulations provide that an individual applying to be an 
enrolled actuary must fulfill (1) an experience requirement, (2) a 
basic actuarial knowledge requirement, and (3) a pension actuarial 
knowledge requirement. All applicants for enrollment must agree to 
comply with these regulations and with any other guidance as required 
by the Joint Board.
    These regulations provide two alternative ways of satisfying the 
experience requirement. Within the 10-year period immediately preceding 
the date of the application, the applicant must have completed either 
(1) at least 36 months of certified responsible pension actuarial 
experience, or (2) at least 18 months of certified responsible pension 
actuarial experience if the applicant has a total of 60 months of 
certified responsible actuarial experience.
    These regulations retain the definitions of responsible actuarial 
experience and responsible pension actuarial experience. Responsible 
actuarial experience means actuarial experience (1) involving 
participation in making determinations that the methods and assumptions 
adopted in the procedures followed in actuarial services are 
appropriate in the light of all pertinent circumstances, and (2) 
demonstrating a thorough understanding of the principles and 
alternatives involved in such actuarial services. Responsible pension 
actuarial experience means responsible actuarial experience involving 
valuations of the liabilities of pension plans, wherein the performance 
of such valuations requires the application of principles of life 
contingencies and compound interest in the determination, under one or 
more standard actuarial cost methods, of such of the following as may 
be appropriate in the particular case: (1) Normal cost; (2) accrued 
liability; (3) payment required to amortize a liability or other amount 
over a period of time; and (4) actuarial gain or loss.
    These regulations define certified responsible actuarial experience 
to mean responsible actuarial experience of an individual that has been 
certified in writing by the individual's supervisor. These regulations 
define certified responsible pension actuarial

[[Page 17763]]

experience to mean responsible pension actuarial experience of an 
individual that has been certified in writing by the individual's 
supervisor if the supervisor is an enrolled actuary. If the 
individual's supervisor is not an enrolled actuary, these regulations 
provide that the pension actuarial experience must be certified in 
writing by both the supervisor and an enrolled actuary with knowledge 
of the individual's pension actuarial experience.
    One commenter requested greater flexibility in satisfying the 
experience requirements for enrollment based on experience in more 
specialized pension areas of practice. These regulations retain the 
requirement that enrolled actuaries have certified responsible pension 
actuarial experience as previously defined because the Joint Board 
believes that a broad base of pension knowledge is necessary to 
recognize issues that may arise even in a specialized area of practice. 
Nonetheless, the Joint Board recognizes that the broad base of 
experience needed to become an enrolled actuary does not qualify an 
enrolled actuary to do every type of work for which an enrolled actuary 
is required.
    In response to the proposed regulation, one commenter suggested 
that, given the pace of change and for consistency with the experience 
requirement for return from inactive status, all of an applicant's 
responsible pension experience should be completed within 5 years 
preceding enrollment (rather than 10 years). The commenter pointed out 
that for reenrollment under the proposed regulations, an inactive 
enrolled actuary would need more recent experience. These regulations 
retain the rule in the current regulations that requires the experience 
for initial enrollment to have been completed within the previous 10 
years, and, as explained in more detail in section IV of this preamble 
(Inactive Enrolled Actuaries), they retain the requirements in the 
proposed regulations for an enrolled actuary who wishes to return to 
active status from inactive status that depends on how long the actuary 
has been on the inactive roster. The difference in the timing of the 
required experience for initial enrollment and for returning from 
inactive status reflects the different purposes served by the two 
requirements. The Joint Board requires enrolled actuaries who let their 
enrollment lapse into inactive status to demonstrate their return to 
active practice with more recent experience. It can be expected that, 
in general, such actuaries are farther along in their careers and are 
more likely to quickly build up, or return to, an active independent 
practice. For such actuaries, the Joint Board believes that recent 
pension experience is paramount. In contrast, it can be expected that 
newly enrolled actuaries will take longer to develop active independent 
practices. For these actuaries, the Joint Board believes that a longer 
look-back period is reasonable.
    In response to the proposed regulations, one commenter suggested 
that, in order to make sure that an actuary does not lose the 
opportunity to get credit for responsible actuarial and responsible 
pension actuarial experience, enrolled actuaries should be required to 
certify the experience of potential candidates annually and when the 
potential candidate changes supervisor or employer. The Joint Board 
feels it is not necessary to add this additional paperwork requirement 
for enrolled actuaries who supervise and train actuaries who are not 
yet enrolled. The Joint Board will address on a case-by-case basis 
situations involving the inability of the Executive Director to obtain 
certification of an applicant's experience.
    These regulations do not amend the definition of basic actuarial 
knowledge required for initial enrollment. Basic actuarial knowledge 
may be obtained in one of three ways--successful completion of a Joint 
Board basic examination; successful completion of one or more proctored 
examinations which are given by an actuarial organization and which the 
Joint Board has determined cover substantially the same subject areas, 
have at least comparable levels of difficulty, and require at least the 
same competence as the Joint Board basic examination; or receipt of a 
bachelor's or higher degree in either actuarial mathematics or another 
area which include at least as many semester hours or quarter hours as 
required by the Joint Board in mathematics, statistics, actuarial 
mathematics, and other areas determined by the Joint Board.
    These regulations provide that an applicant may demonstrate pension 
actuarial knowledge through successful completion, within the 10-year 
period immediately preceding the date of the application for 
enrollment, of either the Joint Board pension examination (currently 
administered as the EA-2A and EA-2B), or an approved pension 
examination, or examinations, given by an actuarial organization which 
the Joint Board has determined cover substantially the same subject 
areas, have at least comparable levels of difficulty, and require at 
least the same competence as the Joint Board pension examination. For 
this purpose, these regulations provide that the date of successful 
completion of an examination is generally the date a candidate sits for 
the examination, provided that the candidate receives a passing grade 
on that examination. However, an applicant who sat for a given 
examination prior to the effective date of these regulations will be 
deemed to have sat for such examination on the effective date.

III. Eligibility for Re-Enrollment

A. Requirement To File an Application for Renewal
    These regulations do not change the requirement that an enrolled 
actuary seeking to renew his or her enrollment must file an application 
for renewal of enrollment between October 1, 2010 and March 1, 2011, 
and between October 1 and March 1 of every third year thereafter. An 
enrolled actuary seeking renewal must complete the required continuing 
professional education hours prior to submitting an application for 
renewal, but in no event later than the December 31 immediately 
preceding the March 1 due date for the application for renewal. These 
regulations continue to provide that the effective date for renewal of 
enrollment for individuals who are currently enrolled (and in active 
status) and who file complete renewal applications by the March 1 due 
date shall be the April 1 immediately following the March 1 due date. 
The effective date of renewal of enrollment for an individual who files 
a complete renewal application after the March 1 due date is the later 
of the April 1 immediately following the due date of application and 
the date of the notice of renewal.
B. Continuing Professional Education Requirement
1. Number of Hours Required
    These regulations retain the general requirement that an enrolled 
actuary earn 36 hours of continuing professional education during each 
full enrollment cycle. These regulations define the enrollment cycle to 
mean the three-year period from January 1, 2011, to December 31, 2013, 
and every three-year period thereafter.
    Several commenters suggested that the time period for earning 
continuing professional education credit should extend beyond the end 
of the enrollment cycle. The Joint Board decided that it is reasonable 
to expect enrolled actuaries to make time for satisfying their 
continuing professional education requirement during the

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enrollment cycle and that extending the end of each enrollment cycle so 
that it overlaps with the beginning of the next enrollment cycle would 
create an unnecessary complication. However, an enrolled actuary who 
does not complete the required hours by December 31 of the enrollment 
cycle may submit an application to return to active status after 
completing the required hours. Such an individual's reenrollment will 
be effective on the later of (1) the April 1 immediately following the 
end of the enrollment cycle or (2) the date that the Joint Board grants 
the application. These regulations include examples that illustrate 
when an enrolled actuary's reenrollment will be effective.
    These regulations make no change to the rule that newly enrolled 
actuaries who are initially enrolled during the first year of an 
enrollment cycle must complete 24 hours of continuing professional 
education hours in the enrollment cycle during which they are enrolled. 
Newly enrolled actuaries who are initially enrolled during the second 
year of an enrollment cycle must complete 12 hours of continuing 
professional education hours in the enrollment cycle during which they 
are enrolled. Newly enrolled actuaries who are initially enrolled 
during the last year of an enrollment cycle are exempt from the 
continuing education requirements until the next enrollment cycle, but 
must file a timely application for renewal.
    These regulations require at least 18 hours of continuing 
professional education in core subject matter during the enrollment 
cycle that ends December 31, 2010, for all enrolled actuaries enrolled 
during the entire cycle. Thereafter, for actuaries who have already 
been enrolled for at least one full enrollment cycle before the start 
of a new enrollment cycle, these regulations provide that only 12 of 
the 36 hours of required continuing professional education during the 
new enrollment cycle must consist of core subject matter.
    These regulations provide that the required continuing professional 
education hours must be earned after January 1 of the year the enrolled 
actuary becomes enrolled. Half of the required hours for newly enrolled 
actuaries must be comprised of core subject matter.
    The Joint Board received comments both in favor of and against the 
proposed two-tiered requirement that 18 hours of continuing 
professional education be core subject matter for enrolled actuaries 
during their first full enrollment cycle but only 12 hours be core 
subject matter for each subsequent enrollment cycle. In light of the 
complexity and rapid changes in core subject matter, the Joint Board 
feels that some ongoing education in core subject matter is always 
necessary. On the other hand, the Joint Board wishes to encourage 
enrolled actuaries at every level of experience to satisfy a portion of 
their continuing professional education requirement through 
participation in non-core programs that are designed to enhance their 
knowledge in matters related to the performance of pension actuarial 
services. The Joint Board feels that the two-tiered approach is the 
best way to achieve that result. Accordingly, these regulations adopt 
the two-tiered requirement as proposed.
    For each full enrollment cycle beginning after December 31, 2010, 
these regulations require at least 2 of the required core hours of 
continuing professional education to relate to ethical standards. Some 
commenters suggested either not treating continuing professional 
education on ethical standards as core subject matter or increasing the 
number of hours required to consist of core subject matter by 2 hours 
to account for the ethics requirement. The Joint Board feels that 
fidelity to the high ethical standards of practice is as essential for 
enrolled actuaries as is knowledge of the technical rules studied in 
other core areas. Ethics have always been considered to be core subject 
matter, and an enrolled actuary who wishes to increase the number of 
hours spent studying the core technical rules may always undertake more 
than the minimum number of core hours. Accordingly, the Joint Board 
feels that including ethical standards as part of the required hours of 
core subject matter is appropriate.
    In response to comments, these regulations clarify that when core 
subject matter hours are required (including when an individual seeks 
to return to active status from inactive status), an individual must 
complete a minimum of two hours of continuing professional education 
credit relating to ethical standards, regardless of the total number of 
core hours required.
    The regulations require an enrolled actuary to retain certain 
records evidencing completion of continuing professional education for 
three years after the end of the enrollment cycle for which the 
enrolled actuary claims the credit. To receive credit based on 
participation in a qualifying program, the regulations require the 
enrolled actuary to retain the certificate of completion or certificate 
of instruction, as applicable. To receive credit for publications, 
these regulations require the enrolled actuary to retain the name of 
the publisher, the title and author of the publication, a copy of the 
publication, the date of publication, the total credit hours earned, 
and the total core and non-core credit hours earned. To receive credit 
for service on a Joint Board advisory committee, for preparation of 
Joint Board examinations, for passing examinations sponsored by 
professional organizations or societies, or for passing the Joint Board 
pension examination, these regulations require the enrolled actuary to 
retain sufficient documentation to establish completion of such hours.
2. Subject Matter of Continuing Professional Education--Core and Non-
Core Subject Matter
    All continuing professional education must be in either core or 
non-core subject matter. The Joint Board received a number of comments 
requesting expansion and clarification of the content that would be 
classified as core or non-core credit. These regulations adopt the same 
definition of core and non-core continuing professional education 
material as proposed. The Joint Board recognizes that more specific 
rules proscribing the required content could provide greater certainty 
for qualifying sponsors and enrolled actuaries regarding the 
designation of credits as core and non-core. However, given the 
frequent changes in pension law, the impact of new court decisions, and 
other changing factors that affect an enrolled actuary's practice, it 
is important to keep the definition of the content requirement somewhat 
flexible. The Joint Board relies on the integrity and judgment of the 
qualifying sponsors to provide appropriate material and to 
appropriately categorize the material as core or non-core.
    Similarly, a number of commenters requested a more specific 
definition of ethical standards for purposes of meeting the ethics 
requirement of the continuing education requirement. Although the Joint 
Board has not amended the regulation, it notes that courses that 
include discussion of actuarial codes of conduct, actuarial 
responsibilities and any actions discussed in section 901.20 of the 
regulations would comply with this requirement.
    These regulations redefine core subject matter as program content 
and knowledge that is integral and necessary to the satisfactory 
performance of pension actuarial services and actuarial certification 
under ERISA and the Internal Revenue Code. Such core subject matter 
includes the

[[Page 17765]]

characteristics of actuarial cost methods under ERISA, actuarial 
assumptions, minimum funding standards, titles I, II, and IV of ERISA, 
requirements with respect to the valuation of plan assets, requirements 
for qualification of pension plans, maximum deductible contributions, 
tax treatment of distributions from qualified pension plans, excise 
taxes related to the funding of qualified pension plans and standards 
of performance (including ethical standards) for actuarial services. 
These regulations further specify that core subject matter includes all 
materials included on the syllabi of any of the pension actuarial 
examinations offered by the Joint Board during the current enrollment 
cycle and the enrollment cycle immediately preceding the current 
enrollment cycle.
    These regulations retain the definition of non-core subject matter 
as program content designed to enhance the knowledge of an enrolled 
actuary in matters related to the performance of pension actuarial 
services. These regulations provide that examples of non-core subject 
matter include economics, computer programming, pension accounting, 
investment and finance, risk theory, communication skills, and business 
and general tax law.
3. Qualifying Program Requirement
    These regulations do not change the requirement that a program used 
to earn continuing professional education credit must be a qualifying 
program. These regulations modify the definition of qualifying program 
to be a course of learning that--(A) Is conducted by a qualifying 
sponsor who identifies the program as a qualifying program; (B) is 
developed by individual(s) qualified in the subject matter; (C) covers 
current subject matter; (D) includes written outlines or textbooks; (E) 
is taught by instructors, discussion leaders, and speakers qualified 
with respect to the course content; (F) includes means for evaluation 
by the Joint Board of technical content and presentation; (G) provides 
a certificate of completion to those who have successfully completed 
the program; and (H) provides a certificate of instruction to those who 
have served as instructors, discussion leaders, or speakers.
    These regulations provide that qualifying sponsors are sponsors 
recognized as such by the Executive Director and whose programs offer 
opportunities for continuing professional education in subject matter 
within the scope of the continuing professional education requirement. 
In response to comments, these regulations have been changed so that 
they do not prohibit a sole proprietor from being a qualifying sponsor. 
These regulations provide that those seeking recognition as a 
qualifying sponsor must file a request with the Executive Director and 
must provide all information deemed necessary for approval by the 
Executive Director, including information to establish that all 
programs identified as qualifying programs by the qualifying sponsor 
will satisfy the requirements for qualifying programs. These 
regulations provide that recognition as a qualifying sponsor by the 
Executive Director shall be effective when approved unless the 
Executive Director provides that it shall be effective on a different 
date, and shall terminate at the end of the sponsor enrollment cycle. 
The sponsor enrollment cycles are three-year periods that begin one-
year later than the enrollment cycles, starting with the sponsor 
enrollment cycle beginning on January 1, 2012. For qualifying sponsors 
approved on or after January 1, 2008, and before January 1, 2012, the 
applicable sponsor enrollment cycle will end December 31, 2011.
    These regulations provide that a program's qualifying sponsor shall 
furnish each individual who successfully completed the qualifying 
program with a certificate listing the name of the participant, the 
name of the qualifying sponsor, the title, location, and speaker(s) of 
each session, the date(s) of participation, the total credit hours 
earned, how many of those hours consisted of core and non-core subject 
matter, how many of those hours relate to ethics, and how many of the 
hours were earned for a formal program with respect to the participant. 
In response to comments, these regulations clarify that it is only the 
qualifying sponsor of a program that may issue a certificate of 
participation.
    These regulations provide that qualifying sponsors shall provide 
each instructor, discussion leader, or speaker with a certificate of 
instruction that lists the name of the instructor, discussion leader, 
or speaker, the name of the qualifying sponsor, the title and location 
of each session at which the individual was an instructor, discussion 
leader, or speaker, the date(s) of the program, the total credit hours 
earned, how many of those hours consisted of core and non-core subject 
matter, how many of those hours relate to ethics, and whether the 
program is a formal program with respect to the instructor.
    The proposed regulations would have defined separate types of 
qualifying programs for formal programs, correspondence and individual 
study programs, and teleconferencing programs. These regulations do not 
segregate qualifying programs into these types. Instead, these 
regulations provide that certain qualifying programs qualify as formal 
programs. Each type of program that would have been separately defined 
under the proposed regulations may still satisfy the requirements of a 
qualifying program.
    In response to comments, the Joint Board notes that the qualifying 
sponsor must take reasonable steps to verify participation. The nature 
of the program will affect the means by which the qualifying sponsor 
verifies participation. Under this approach, a qualifying program that 
is either a teleconference or a program attended in person may be a 
formal program but the manner in which the qualifying sponsor verifies 
participation will be different depending on the manner of 
participation. In contrast, a correspondence or individual study 
program would never be a formal program but could nonetheless be a 
qualifying program if the qualifying sponsor verifies participation 
(for example, with a written examination).
    In response to comments, these regulations clarify that a 
qualifying sponsor must maintain records to verify that each program it 
sponsors is a qualifying program, including the certificates of 
completion, certificates of instruction, and outlines and course 
material. In the case of programs with more than one session, the 
qualifying sponsor must keep records to verify which session(s) each 
participant completed. These regulations clarify that all of these 
records are required to be maintained for six years after the end of 
the sponsor enrollment cycle in which the program was held.
    Several commenters asked for clarification on the ability to use 
emerging technologies for record retention and transmission. The 
regulations do not specify the format in which records must be 
maintained or provided but merely require that copies be provided and 
produced upon request. Accordingly, records may be maintained 
electronically so long as a copy can be produced upon request.
4. Formal Programs
    These regulations require at least one-third of the required hours 
to consist of participation in a formal program. In response to 
comments on the proposed regulations, these regulations expand the 
definition of a formal program to take into account modern technologies 
that permit participation and interaction among participants who are in 
different locations.
    Under these regulations, whether a program qualifies as a formal 
program is

[[Page 17766]]

determined on a participant-by-participant basis. These regulations 
provide that a qualifying program qualifies as a formal program with 
respect to a participant only if the participant simultaneously 
participates in the program in the same physical location with at least 
two other participants engaged in substantive pension service. The 
participants with respect to whom the program is a formal program must 
also have the opportunity to interact with another individual qualified 
with respect to the course content who serves as an instructor, whether 
or not the instructor is in the same physical location as the 
participants. Groups of three or more participants who are in the same 
physical location may participate in a formal program in person, via 
the Internet, videoconferencing, or teleconferencing. If the qualifying 
program is pre-recorded, to qualify as a formal program there must be a 
qualified individual who serves as the instructor and is available to 
answer questions immediately following the pre-recorded program.
    Under these regulations, a qualifying program is a formal program 
with respect to the instructor only if the instructor is in the 
physical presence of at least three other individuals engaged in 
substantive pension service.
5. Alternate Ways of Earning Continuing Professional Education Credit
    These regulations provide six ways to satisfy the continuing 
professional education requirement other than through participation in 
a qualifying program. First, up to half of the required hours may be 
satisfied by serving as an instructor, discussion leader, or speaker at 
a qualifying program. For this purpose the instructor, discussion 
leader, or speaker is credited with 4 hours of continuing professional 
education credit for each 50 minutes completed during a qualifying 
program. In response to a comment, these regulations clarify that if 
the program is a formal program with respect to the instructor, only 
the time spent during the actual program is counted toward satisfaction 
of the formal program requirement. The nature of the subject matter 
will determine whether the credit hours consist of core or non-core 
subject matter. These regulations expressly provide that panelists, 
moderators, and others who are not required to prepare substantive 
subject matter for their portion of the program are not entitled to 
credit as an instructor, discussion leader, or speaker, but they may 
qualify for participation in the program.
    Second, up to 25 percent of the required hours may be awarded to 
the author, co-author, or a person listed as a major contributor for 
each hour spent on the creation of peer-reviewed material for 
publication or distribution on matters directly related to core or non-
core subject matter. To qualify, the material must be available on 
reasonable terms for acquisition and use by all enrolled actuaries.
    If the material is re-published or re-distributed, credit will be 
awarded only for time spent revising a substantial portion of the 
material; for example, to reflect changes in law or practices relative 
to the performance of pension actuarial services.
    Third, these regulations permit the Joint Board to award continuing 
professional education credit for service on (any of) its advisory 
committee(s), to the extent that the Joint Board considers awarding 
such credit is warranted by the service rendered. This provision 
recognizes the fact that the work done by the members of the advisory 
committee involves detailed review of materials that constitute core 
subject matter.
    Fourth, these regulations permit the Joint Board to award education 
credit for participation in drafting questions for use on Joint Board 
examinations or in pretesting its examinations, to the extent that the 
Joint Board considers awarding such credit appropriate. These 
regulations limit the education credit for preparation of Joint Board 
examinations to 50 percent of the continuing professional education 
requirement for the applicable enrollment cycle.
    One commenter suggested that the regulations should specify the 
number of continuing professional education credits that may be granted 
for service on an Advisory Committee to the Joint Board and other 
committees involved in the preparation of enrollment examinations, and 
to eliminate the 50 percent limit on continuing professional education 
requirements that can be satisfied by service on an examination writing 
committee. The regulations retain the Joint Board's authority to 
determine how many credits are granted for service rendered.
    In the Board's experience, most actuaries who serve on an 
examination writing committee tend to work on only one of the 
examinations; the Board believes that the scope of the material covered 
on a given examination is not broad enough for service on a writing 
committee to count toward more than 50% of the continuing professional 
education requirements for a given enrollment cycle. Therefore, 
although the Board appreciatively acknowledges the substantial time and 
effort expended by members of the writing committees, the final 
regulations retain the 50% limit.
    The commenter also suggested that service on an Advisory Committee 
to the Joint Board throughout an entire enrollment cycle fulfill all 
the continuing professional education requirements for that cycle, 
including the requirement to earn credits related to ethical standards. 
However, the Board does not believe that the exam syllabus or other 
work typically done by an Advisory Committee includes enough material 
directly related to ethical standards to fulfill the requirement for 
this type of credit. Therefore, the Board does not anticipate that 
credits related to ethical standards would be granted on the basis of 
service on an Advisory Committee.
    Fifth, these regulations provide that individuals may earn 
continuing professional education credit for achieving a passing grade 
on proctored examinations sponsored by a professional organization or 
society recognized by the Joint Board. Separate provisions, described 
in the next paragraph, apply to the Joint Board's examinations. These 
regulations further provide that such credit is limited to the number 
of hours scheduled for the examination that are attributable to content 
that qualifies as either core or non-core subject matter and that, 
regardless of the nature of the content, none of the credit counts 
toward the core credit requirement. All of an enrolled actuary's non-
core credit requirement may be satisfied with this type of credit.
    Sixth, these regulations provide that enrolled actuaries who are 
enrolled prior to the beginning of an enrollment cycle may satisfy the 
entire continuing professional education requirement for the enrollment 
cycle by both (1) achieving a passing score on the Joint Board pension 
examination administered during the enrollment cycle and (2) completing 
a minimum of 12 hours of continuing professional education through 
participation in formal programs during the enrollment cycle.
6. Waivers
    These regulations permit the Executive Director to waive all or 
part of an enrolled actuary's continuing professional education 
requirement. An enrolled actuary seeking such a waiver must submit a 
request for a waiver to the Executive Director. This request must 
contain evidence sufficient to demonstrate that the enrolled actuary 
made every effort throughout the

[[Page 17767]]

enrollment cycle to participate in one or more qualifying programs that 
would have satisfied the continuing professional education 
requirements. The enrolled actuary is required to submit supporting 
documentation with the waiver application as well as any additional 
documentation or explanation deemed necessary by the Executive 
Director. The proposed regulations would have imposed a deadline on the 
waiver application. Instead, these regulations provide that the 
enrolled actuary seeking to rely on a waiver must receive the waiver 
from the Executive Director before filing an application for renewal of 
enrollment.

IV. Inactive Enrolled Actuaries

    These regulations provide that the Executive Director shall 
maintain a roster of individuals who are in inactive status, in 
addition to rosters of individuals who are duly enrolled and those 
whose enrollment has been suspended or terminated. These regulations 
also give the Executive Director explicit permission to publish any or 
all of the rosters, including display on the Joint Board's Web site, to 
the extent permitted by law.
    These regulations extend the period of time that an individual may 
remain on the roster of inactive enrolled actuaries from three years to 
up to three enrollment cycles. Under these regulations, a person who is 
on the roster of inactive enrolled actuaries for three enrollment 
cycles without returning to active status must satisfy the requirements 
for initial enrollment to become an active enrolled actuary. For this 
purpose, these regulations provide a transition rule that treats 
enrolled actuaries who are inactive or retired as of April 1, 2010 as 
if they were placed on the roster of inactive enrolled actuaries on 
that date.
    To remain on the roster of active enrolled actuaries, an enrolled 
actuary must submit a timely application for renewal showing 
satisfaction of the requirements for reenrollment, including completion 
of the required continuing professional education hours within the 
appropriate time frame.
    The Executive Director will automatically move enrolled actuaries 
who do not submit a timely application for reenrollment and enrolled 
actuaries who submit an application that on its face does not show 
information sufficient to satisfy the requirements for renewal (for 
example, an application that does not show sufficient continuing 
professional education credits). Such enrolled actuaries will be placed 
on the roster of inactive enrolled actuaries as of April 1 following 
the March 1 due date for the application. Enrolled actuaries who submit 
an application that on its face does not show information sufficient to 
satisfy the requirements for renewal will not be entitled to a refund 
of the application fee. Enrolled actuaries who submit an application 
that on its face does not show information sufficient to satisfy the 
requirements for renewal will be considered inactive as of the April 1 
immediately following the March 1 due date for the application even if 
the Executive Director does not become aware of the insufficiency of 
the application until after April 1.
    In addition, the Executive Director may audit renewal applications 
to verify the information submitted. If the Executive Director 
determines that the information on the application is inaccurate, the 
Executive Director will move the enrolled actuary to the roster of 
inactive enrolled actuaries only after notifying the enrolled actuary 
of the Executive Director's intent to do so and giving the enrolled 
actuary 60 days to respond. The Executive Director will consider any 
written response in making a final determination as to eligibility for 
renewal of enrollment. The Executive Director will notify the enrolled 
actuary by mail of the final determination as to whether or not to 
place the enrolled actuary on the inactive roster at that time. If the 
Executive Director makes a final determination to place an individual 
on the roster of inactive enrolled actuaries, the individual may seek 
review of the determination from the Joint Board by submitting a 
request to the Joint Board within 30 days of the notice of final 
determination.
    These regulations provide that while an individual remains on the 
roster of inactive enrolled actuaries, such person may not indicate to 
others that he or she is an enrolled actuary and is not eligible to 
perform actuarial services as an enrolled actuary under ERISA or the 
Internal Revenue Code. These regulations provide that an individual 
still on the roster of inactive enrolled actuaries who wishes to return 
to active status may file an application for renewal of enrollment, but 
the requirements for reenrollment are different depending on whether 
the applicant is in the first, second, or third enrollment cycle on the 
roster of inactive enrolled actuaries.
    These regulations provide that individuals who apply for renewal of 
enrollment during their first enrollment cycle on the inactive roster 
must complete 36 hours of continuing professional education between the 
beginning of the prior enrollment cycle and the date of the application 
for renewal.
    These regulations provide that individuals who apply for renewal of 
enrollment during their second enrollment cycle on the inactive roster 
must complete 48 hours of continuing professional education credit plus 
demonstrate 18 months of certified responsible pension actuarial 
experience. These regulations provide that the continuing professional 
education credit must have been earned since the beginning of the 
applicant's first enrollment cycle on the inactive roster. The 
qualifying responsible pension actuarial experience must have occurred 
after the beginning of the applicant's first enrollment cycle on the 
inactive list.
    These regulations provide that individuals who apply for renewal of 
enrollment during their third enrollment cycle on the inactive roster 
must complete 60 hours of continuing professional education credit plus 
demonstrate 18 months of certified responsible pension actuarial 
experience. For this purpose, these regulations provide that the 
continuing professional education credit must have been earned since 
the beginning of the applicant's second enrollment cycle and the 
qualifying actuarial experience must have occurred after the beginning 
of the applicant's second enrollment cycle on the inactive list.
    Regardless of when the inactive enrolled actuary applies for 
renewal, these regulations provide that any continuing professional 
education credit used to qualify for reenrollment may not also be used 
to satisfy the continuing professional education requirement during the 
applicant's first enrollment cycle back on the active roster.

V. Standards of Performance

    These regulations also expand upon the standards of performance of 
actuarial services. These regulations add a requirement that an 
enrolled actuary shall perform actuarial services only in accordance 
with all of the duties and requirements for such persons under 
applicable law and consistent with relevant generally accepted 
standards for professional responsibility and ethics.
    Several comments were received with respect to the standards of 
practice provisions that were modeled on the obligations set forth in 
Circular 230 of all persons practicing before the IRS. The Joint Board 
believes that the rules in Circular 230 pertaining to due diligence, 
solicitations, prompt disposition of pending matters, and the return of 
client records are equally

[[Page 17768]]

pertinent to practice before the PBGC and DOL, as well as the IRS. 
These provisions have been retained unchanged from the proposal, except 
that with respect to the return of client records. With respect to the 
return of client records, a commenter asked that the provision be 
clarified to provide the ability to retain records that implicate 
intellectual property rights. The Board believes that the duty to 
return or make available records to the client should not be made 
narrower than the scope of the provision in Circular 230. Nonetheless, 
to conform more specifically to the concept of Circular 230 and the 
purpose of incorporating the provisions into these regulations, the 
provision regarding ``Records of the client'' for this purpose has been 
modified to provide only for the return of documents necessary to 
comply with legal obligations under ERISA and the Internal Revenue 
Code.
    These final regulations modify the rules regarding conflicts of 
interest. The Joint Board received several comments on the proposed 
rule to require that disclosure of conflicts of interest be made in 
writing to all affected parties and that the affected parties agree in 
writing to the enrolled actuary performing the services. After 
consideration of these comments, the Joint Board has determined that it 
will adopt rules that are similar to the conflict of interest rules 
that apply to those practicing before the Internal Revenue Service. See 
Treasury Department Circular No. 230, 31 CFR 10.29. Accordingly, the 
regulations provide that, unless an exception applies, an enrolled 
actuary shall not perform actuarial services for a client if the 
representation involves a conflict of interest. A conflict of interest 
exists if either (1) the representation of one client will be directly 
adverse to another client; or (2) there is a significant risk that the 
representation of one or more clients will be materially limited by the 
enrolled actuary's responsibilities to another client, a former client, 
or by a personal interest of the enrolled actuary. Notwithstanding the 
existence of a conflict of interest, the enrolled actuary may represent 
a client if (1) the enrolled actuary reasonably believes that the 
enrolled actuary will be able to provide competent and diligent 
representation to each affected client, (2) the representation is not 
prohibited by law, and (3) each affected client waives the conflict of 
interest and gives informed consent, at the time the existence of the 
conflict of interest is known by the enrolled actuary.
    Nothing in these final regulations is intended to alter the rules 
for practice before the Internal Revenue Service under Treasury 
Department Circular No. 230.
    The proposed regulations would have imposed a requirement that, 
upon learning of another enrolled actuary's material violation of the 
standards of performance of actuarial services, an enrolled actuary 
report the violation to the Executive Director. The Joint Board 
received many comments in response to this proposal. Several commenters 
suggested the elimination of the proposed reporting requirement. In the 
alternative, commenters asked that the requirement be significantly 
modified. Commenters were concerned that the reporting requirement 
would discourage cooperation and sharing of information among enrolled 
actuaries and that it would conflict with other rules that require 
enrolled actuaries not to disclose confidential or privileged 
information. Commenters also suggested that an enrolled actuary should 
not be required to report violations that are resolved through 
discussion with the other enrolled actuary. Finally, commenters asked 
for a clarification of the term material violation.
    In light of the comments received, the Joint Board decided not to 
include the proposed reporting requirement as part of the standards of 
performance for enrolled actuaries. Without amendment, the regulations 
already include a rule that if an officer or employee of the Department 
of Treasury, the Department of Labor, the Pension Benefit Guaranty 
Corporation, or a member of the Joint Board has reason to believe that 
an enrolled actuary has violated any provision of the regulations, or 
if such person receives information to that effect, he or she may 
inform the Executive Director. Without amendment, the regulations 
already provide that others may make such a report to the Executive 
Director, an officer or employee of the Department of Treasury, the 
Department of Labor, the Pension Benefit Guaranty Corporation, or a 
member of the Joint Board. These regulations amend that provision only 
to provide that the optional report should be made directly to the 
Executive Director. Self-policing is an important part of maintaining 
the high standards of the profession, and the Joint Board encourages 
enrolled actuaries to report violations of the regulations to the 
Executive Director. However, in light of the concerns raised by 
commenters, the Joint Board decided not to change the existing rule 
except to provide that any report should be made directly only to the 
Executive Director.
    In response to comments, these regulations clarify that the 
requirement for an enrolled actuary to ensure that the actuarial 
assumptions are reasonable individually and in combination, and the 
actuarial cost method and the actuarial method of valuation of assets 
are appropriate applies unless the actuarial assumptions or methods are 
mandated by law.

Special Analyses

    Executive Orders 13563 and 12866 direct agencies to assess all 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). Executive 
Order 13563 emphasizes the importance of quantifying both costs and 
benefits, of reducing costs, of harmonizing rules, and of promoting 
flexibility. This rule has been designated a ``significant regulatory 
action'' although not economically significant, under section 3(f) of 
Executive Order 12866. Accordingly, the rule has been reviewed by the 
Office of Management and Budget.
    It also has been determined that section 553(b) of the 
Administrative Procedure Act (5 U.S.C. chapter 5) does not apply to 
these regulations. It is hereby certified that the collection of 
information imposed by these regulations will not have a significant 
economic impact on a substantial number of small entities. There are 
presently only about 4000 enrolled actuaries and the changes made by 
the final regulations will reduce the overall collection of information 
burden by removing the requirement for participants in continuing 
education courses to keep course materials. Qualified sponsors of 
continuing education courses, a few of which are small entities, have a 
paperwork burden under these regulations that is substantially the same 
as the pre-existing burden. Therefore, the economic impact of the 
collection of information requirement will not be significant and the 
number of small entities affected by the collection of information 
requirement will not be substantial. Accordingly, the Regulatory 
Flexibility Act (5 U.S.C. chapter 6) does not apply. The notice of 
proposed rulemaking was submitted to the Chief Counsel for Advocacy of 
the Small Business Administration for comment on its impact on small 
business.

Drafting Information

    The principal author of these regulations is Michael P. Brewer, IRS

[[Page 17769]]

Office of Division Counsel/Associate Chief Counsel (Tax Exempt and 
Government Entities). However, other personnel from the Joint Board and 
the IRS participated in their development.

List of Subjects in 20 CFR Part 901

    Regulations governing the performance of actuarial services under 
the Employee Retirement Income Security Act of 1974.

Adoption of Amendments to the Regulations

    Accordingly, 20 CFR part 901 is amended as follows:

PART 901--REGULATIONS GOVERNING THE PERFORMANCE OF ACTUARIAL 
SERVICES UNDER THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974

0
Paragraph 1. The authority citation for part 901 continues to read in 
part as follows:

    Authority: These rules are issued under authority of 88 Stat. 
1002; 29 U.S.C. 1241, 1242. See also 5 U.S.C. 301; 31 U.S.C. 330; 
and 31 U.S.C. 321.


Sec.  901.0  [Amended]

0
Par. 2. Section 901.0 is amended by removing the phrase ``subpart D of 
this part is reserved and will set forth'' and adding in its place the 
phrase ``subpart D sets forth'' in the second sentence.


0
Par. 3. Section 901.1 is amended by:
0
A. Amending paragraph (g) by removing the phrase ``approved by the 
Joint Board (or its designee) to perform'' and adding in its place the 
phrase ``approved by the Joint Board for the Enrollment of Actuaries 
(the Joint Board), or its designee, to perform''.
0
B. Adding new paragraphs (i), (j) and (k) to read as follows:


Sec.  901.1  Definitions.

* * * * *
    (i) Certified responsible actuarial experience means responsible 
actuarial experience of an individual that has been certified in 
writing by the individual's supervisor.
    (j) Certified responsible pension actuarial experience means 
responsible pension actuarial experience of an individual that has been 
certified in writing by the individual's supervisor if the supervisor 
is an enrolled actuary. If the individual's supervisor is not an 
enrolled actuary, the pension actuarial experience must be certified in 
writing by both the supervisor and an enrolled actuary with knowledge 
of the individual's pension actuarial experience.
    (k) Enrollment cycle means the three-year period from January 1, 
2011, to December 31, 2013, and every three-year period thereafter.


Sec.  901.10  [Amended]

0
Par. 4. Section 901.10 is amended by:
0
A. Amending paragraph (a) by removing the phrase ``shall agree to 
comply with the regulations of the Joint Board'' and adding in its 
place the phrase ``shall agree to comply with these regulations and any 
other guidance as required by the Joint Board''.
0
B. Adding a second sentence to paragraph (a) to read ``A reasonable 
non-refundable fee may be charged for each application for enrollment 
filed.''


0
Par. 5. Section 901.11 is amended by:
0
A. Revising the first sentence of paragraph (a).
0
B. Revising paragraphs (c) and (d).
0
C. Revising paragraphs (e) introductory text, (e)(1) and (e)(2)(i).
0
D. Revising the last sentence of paragraph (e)(2)(ii).
0
E. Adding new paragraphs (e)(2)(iv), (v), and (vi).
0
F. Removing paragraph (e)(3).
0
G. Revising paragraphs (f)(1) and (f)(1)(i).
0
H. Revising the second sentence of paragraph (f)(1)(ii), and paragraph 
(f)(1)(iv).
0
I. Revising paragraph (f)(2).
0
J. Adding paragraph (f)(3).
0
K. Revising paragraph (g).
0
L. Removing the last two sentences of paragraph (h)(2).
0
M. Removing paragraph (l).
0
N. Redesignating paragraphs (i), (j), and (k) as paragraphs (j), (k), 
and (l), respectively.
0
O. Adding and reserving new paragraph (i).
0
P. Revising newly redesignated paragraphs (j) and (k).
0
Q. Revising the first sentences of newly redesignated paragraphs (l)(1) 
and (l)(2), and the second sentence of newly redesignated paragraph 
(l)(3).
0
R. Revising newly redesignated paragraphs (l)(4), (l)(5), (l)(6), and 
(l)(7), and the first sentence of newly redesignated paragraph (l)(9).
0
S. Revising paragraph (n).
0
T. Adding new paragraphs (o) and (p).
    The revisions and additions read as follows:


Sec.  901.11  Enrollment procedures.

    (a) Enrollment. The Joint Board shall enroll each applicant it 
determines has met the requirements of these regulations, and any other 
guidance as required by the Joint Board, and shall so notify the 
applicant. * * *
* * * * *
    (c) Rosters--(1) Maintenance of rosters. The Executive Director 
shall maintain rosters of--
    (i) All actuaries who are duly enrolled under this part;
    (ii) All individuals whose enrollment has been suspended or 
terminated; and
    (iii) All individuals who are in inactive status.
    (2) Publication of Rosters. The Executive Director may publish any 
or all of the rosters, including display on the Joint Board's Web site, 
to the extent permitted by law.
    (d) Renewal of enrollment. To maintain active enrollment to perform 
actuarial services under ERISA, each enrolled actuary is required to 
have his/her enrollment renewed as set forth herein.
    (1) Each enrolled actuary must file an application for renewal of 
enrollment on the prescribed form no earlier than October 1, 2010, and 
no later than March 1, 2011, and no earlier than October 1 and no later 
than March 1 of every third year thereafter. If March 1 is a Saturday, 
Sunday, or holiday, the due date shall be the next day that is not a 
Saturday, Sunday, or holiday.
    (2) The effective date of renewal of enrollment for an individual 
who files a complete renewal application within the time period 
described in paragraph (d)(1) of this section is the April 1 
immediately following the date of application. The effective date of 
renewal of enrollment for an individual who files a complete renewal 
application after the due date described in paragraph (d)(1) of this 
section is the later of the April 1 immediately following the due date 
of application and the date of the notice of renewal.
    (3) Forms required for renewal may be obtained from the Executive 
Director.
    (4) A reasonable non-refundable fee may be charged for each 
application for renewal of enrollment filed.
    (e) Condition for renewal: Continuing professional education. To 
qualify for renewal of enrollment, an enrolled actuary must certify, on 
the form prescribed by the Executive Director, that he/she has 
completed the applicable minimum number of hours of continuing 
professional education credit required by this paragraph (e) and 
satisfied the recordkeeping requirements of paragraph (j) of this 
section.
    (1) Transition rule for renewal of enrollment effective April 1, 
2011. (i) A minimum of 36 hours of continuing professional education 
credit must be completed between January 1, 2008 and December 31, 2010. 
Of the 36 hours, at least 18 must consist of core subject

[[Page 17770]]

matter; the remainder may be non-core subject matter.
    (ii) An individual who received initial enrollment in 2008 must 
complete 24 hours of continuing professional education by December 31, 
2010. An individual who received initial enrollment in 2009 must 
complete 12 hours of continuing professional education by December 31, 
2010. In either case, at least one-half of the applicable hours must 
consist of core subject matter; the remainder may consist of non-core 
subject matter. For purposes of this paragraph (e)(1)(ii), credit will 
be awarded for continuing professional education completed after 
January 1 of the year in which initial enrollment was received.
    (iii) An individual who receives initial enrollment during 2010 is 
exempt from the continuing professional education requirements during 
2010, but must file a timely application for renewal during the time 
period described in paragraph (d)(1) of this section.
    (2) For renewal of enrollment effective April 1, 2014, and every 
third year thereafter. (i) A minimum of 36 hours of continuing 
professional education credit must be completed between January 1, 2011 
and December 31, 2013, and between January 1 and December 31 for each 
three-year period subsequent thereto.
    (ii) * * * For purposes of this paragraph (e)(2)(ii), credit will 
be awarded for continuing professional education completed after 
January 1 of the year in which initial enrollment was received.
* * * * *
    (iv) For an individual who was initially enrolled before January 1, 
2008 (and who has therefore completed at least one full enrollment 
cycle as of January 1, 2011), at least 12 hours of the 36 hours of 
continuing professional education required for each enrollment cycle 
must consist of core subject matter; the remainder may consist of non-
core subject matter.
    (v) For an individual who was initially enrolled on or after 
January 1, 2008, at least 18 hours of his or her 36 hours of continuing 
professional education required for the first full enrollment cycle 
must consist of core subject matter. Thereafter, for such individuals, 
for each subsequent enrollment cycle at least 12 hours of the 36 hours 
must consist of core subject matter. In each instance, the remainder 
may consist of non-core subject matter.
    (vi) When core subject matter hours are required (including when an 
individual seeks to return to active status from inactive status), an 
individual must complete a minimum of two hours of continuing 
professional education credit relating to ethical standards, regardless 
of the total number of core hours required.
    (f) Qualifying continuing professional education--(1) In general. 
To qualify for continuing professional education credit an enrolled 
actuary must complete his/her hours of continuing professional 
education credit under a qualifying program, within the meaning of 
paragraph (f)(2) of this section, consisting of core and/or non-core 
subject matter. In addition, a portion of the continuing professional 
education credit may be earned under the provisions of paragraph (g) of 
this section. In any event, no less than \1/3\ of the total hours of 
continuing professional education credit required for an enrollment 
cycle must be obtained by participation in a formal program or 
programs, within the meaning of paragraph (f)(2)(ii)(A) of this 
section.
    (i) Core subject matter is program content and knowledge that is 
integral and necessary to the satisfactory performance of pension 
actuarial services and actuarial certification under ERISA and the 
Internal Revenue Code. Such core subject matter includes the 
characteristics of actuarial cost methods under ERISA, actuarial 
assumptions, minimum funding standards, titles I, II, and IV of ERISA, 
requirements with respect to the valuation of plan assets, requirements 
for qualification of pension plans, maximum deductible contributions, 
tax treatment of distributions from qualified pension plans, excise 
taxes related to the funding of qualified pension plans and standards 
of performance (including ethical standards) for actuarial services. 
Core subject matter includes all materials included on the syllabi of 
any of the pension actuarial examinations offered by the Joint Board 
during the current enrollment cycle and the enrollment cycle 
immediately preceding the current enrollment cycle.
    (ii) * * * Examples include economics, computer programming, 
pension accounting, investment and finance, risk theory, communication 
skills, and business and general tax law.
* * * * *
    (iv) The same course of study cannot be used more than once within 
a given 36-month period to satisfy the continuing professional 
education requirements of these regulations. A program or session 
bearing the same or a similar title to a previous one may be used to 
satisfy the requirements of these regulations if the major content of 
the program or session differs substantively from the previous one.
    (2) Qualifying Program--(i) In general. A qualifying program is a 
course of learning that--
    (A) Is conducted by a qualifying sponsor, within the meaning of 
paragraph (f)(3) of this section, who identifies the program as a 
qualifying program;
    (B) Is developed by individual(s) qualified in the subject matter;
    (C) Covers current subject matter;
    (D) Includes written outlines or textbooks;
    (E) Is taught by instructors, discussion leaders, and speakers 
qualified with respect to the course content;
    (F) Includes means for evaluation by the Joint Board of technical 
content and presentation;
    (G) Provides a certificate of completion, within the meaning of 
paragraph (f)(3)(iv) of this section, to each person who successfully 
completed the program; and
    (H) Provides a certificate of instruction, within the meaning of 
paragraph (f)(3)(v) of this section, to each person who served an 
instructor, discussion leader, or speaker.
    (ii) Formal programs--(A) Participants. Formal programs are 
programs that meet all of the requirements of this paragraph (f)(2)(ii) 
and paragraph (f)(2)(i) of this section. Whether a program qualifies as 
a formal program is determined on a participant-by-participant basis. A 
qualifying program qualifies as a formal program with respect to a 
participant if the participant simultaneously participates in the 
program in the same physical location with at least two other 
participants engaged in substantive pension service, and the 
participants have the opportunity to interact with another individual 
qualified with respect to the course content who serves as an 
instructor, whether or not the instructor is in the same physical 
location. Groups of three or more participants who are in the same 
physical location may participate in a formal program in person or via 
the Internet, videoconferencing, or teleconferencing. If the qualifying 
program is pre-recorded, to qualify as a formal program, there must be 
a qualified individual who serves as the instructor and is available to 
answer questions immediately following the pre-recorded program.
    (B) Instructor. A qualifying program is a formal program with 
respect to the instructor only if the program is a formal program under 
paragraph (f)(2)(ii)(A) of this section with respect

[[Page 17771]]

to at least three participants and the instructor is in the physical 
presence of at least three other individuals engaged in substantive 
pension service.
    (3) Qualifying sponsors--(i) In general. Qualifying sponsors are 
organizations recognized by the Executive Director whose programs offer 
opportunities for continuing professional education in subject matter 
within the scope of this section.
    (ii) Recognition by the Executive Director. An organization 
requesting qualifying sponsor status shall file a sponsor agreement 
request with the Executive Director and furnish information in support 
of such request as deemed necessary for approval by the Executive 
Director. Such information shall include sufficient information to 
establish that all programs designated as qualifying programs offered 
by the qualifying sponsor will satisfy the requirements of paragraph 
(f)(2) of this section. Recognition as a qualifying sponsor by the 
Executive Director shall be effective when approved, unless the 
Executive Director provides that it shall be effective on a different 
date, and shall terminate at the end of the sponsor enrollment cycle. 
The Executive Director may publish the names of such sponsors on a 
periodic basis.
    (iii) Sponsor enrollment cycle--(A) Transition sponsor enrollment 
cycle. The transition sponsor enrollment cycle is the period beginning 
on January 1, 2008 and ending December 31, 2011.
    (B) Subsequent sponsor enrollment cycles. After the transition 
sponsor enrollment cycle, the sponsor enrollment cycle means the three-
year period from January 1, 2012, to December 31, 2014, and every 
three-year period thereafter.
    (iv) Certificates of completion. Upon verification of successful 
completion of a qualifying program, the program's qualifying sponsor 
shall furnish each individual who successfully completed the qualifying 
program with a certificate listing the following information:
    (A) The name of the participant.
    (B) The name of the qualifying sponsor.
    (C) The title, location, and speaker(s) of each session attended.
    (D) The dates of the program.
    (E) The total credit hours earned, the total core and non-core 
credit hours earned, and how many of those hours relate to ethics.
    (F) Whether or not the program is a formal program with respect to 
the participant.
    (v) Certificates of instruction. The program's qualifying sponsor 
shall furnish to each instructor, discussion leader, or speaker, a 
certificate listing the following information:
    (A) The name of the instructor, discussion leader, or speaker.
    (B) The name of the qualifying sponsor.
    (C) The title and location of the program.
    (D) The dates of the program.
    (E) The total credit hours earned and the total core and non-core 
credit hours earned for the program, and how many of those hours relate 
to ethics.
    (F) Whether or not the program is a formal program with respect to 
the instructor.
    (g) Alternative means for completion of credit hours--(1) In 
general. In addition to credit hours completed under paragraph (f) of 
this section, an enrolled actuary may be awarded continuing 
professional education credit under the provisions of this paragraph 
(g).
    (2) Serving as an instructor, discussion leader or speaker. (i) 
Four credit hours (that is, 200 minutes) of continuing professional 
education credit will be awarded for each 50 minutes completed as an 
instructor, discussion leader, or speaker at a qualifying program which 
meets the continuing professional education requirements of paragraph 
(f) of this section. If the qualifying program is a formal program with 
respect to the instructor, only the time spent during the actual 
program is counted toward satisfaction of the formal program 
requirement.
    (ii) The credit for instruction and preparation may not exceed 50 
percent of the continuing professional education requirement for an 
enrollment cycle.
    (iii) Presentation of the same material as an instructor, 
discussion leader, or speaker more than one time in any 36-month period 
will not qualify for continuing professional education credit. A 
program will not be considered to consist of the same material if a 
substantial portion of the content has been revised to reflect changes 
in the law or practices relative to the performance of pension 
actuarial service.
    (iv) Credit as an instructor, discussion leader, or speaker will 
not be awarded to panelists, moderators, or others who are not required 
to prepare substantive subject matter for their portion of the program. 
However, such individuals may be awarded credit for attendance, 
provided the other provisions of this section are met.
    (v) The nature of the subject matter will determine if credit will 
be of a core or non-core nature.
    (3) Credit for publications. (i) Continuing professional education 
credit will be awarded for the creation of peer-reviewed materials for 
publication or distribution with respect to matters directly related to 
the continuing professional education requirements of this section. 
Credit will be awarded to the author, co-author, or a person listed as 
a major contributor.
    (ii) One hour of credit will be allowed for each hour of 
preparation time of the material. It will be the responsibility of the 
person claiming the credit to maintain records to verify preparation 
time.
    (iii) Publication or distribution may utilize any available 
technology for the dissemination of written, visual or auditory 
materials.
    (iv) The materials must be available on reasonable terms for 
acquisition and use by all enrolled actuaries.
    (v) The credit for the creation of materials may not exceed 25 
percent of the continuing professional education requirement of any 
enrollment cycle.
    (vi) The nature of the subject matter will determine if credit will 
be of a core or non-core nature.
    (vii) Publication of the same material more than one time will not 
qualify for continuing professional education credit. A publication 
will not be considered to consist of the same material if a substantial 
portion has been revised to reflect changes in the law or practices 
relative to the performance of pension actuarial service.
    (4) Service on Joint Board advisory committee(s). Continuing 
professional education credit may be awarded by the Joint Board for 
service on (any of) its advisory committee(s), to the extent that the 
Joint Board considers warranted by the service rendered.
    (5) Preparation of Joint Board examinations. Continuing 
professional education credit may be awarded by the Joint Board for 
participation in drafting questions for use on Joint Board examinations 
or in pretesting its examinations, to the extent the Joint Board 
determines suitable. Such credit may not exceed 50 percent of the 
continuing professional education requirement for the applicable 
enrollment cycle.
    (6) Examinations sponsored by professional organizations or 
societies. Individuals may earn continuing professional education 
credit for achieving a passing grade on proctored examinations 
sponsored by a professional organization or society recognized by the 
Joint Board. Such credit is limited to the number of hours scheduled 
for each examination and may be applied only as non-core credit 
provided the content of the examination

[[Page 17772]]

is core or non-core. No credit may be earned for hours attributable to 
any content that is neither core nor non-core.
    (7) Joint Board pension examination. Individuals may establish 
eligibility for renewal of enrollment for any enrollment cycle by--
    (i) Achieving a passing score on the Joint Board pension 
examination, as described in Sec.  901.12(d)(1)(i), administered under 
this part during the applicable enrollment cycle; and
    (ii) Completing a minimum of 12 hours of qualifying continuing 
professional education by attending formal program(s) during the same 
applicable enrollment cycle. This option of satisfying the continuing 
professional education requirements is not available to those who 
receive initial enrollment during the enrollment cycle.
* * * * *
    (i) [Reserved].
    (j) Recordkeeping requirements--(1) Qualifying sponsors. A 
qualifying sponsor must maintain records to verify that each program it 
sponsors is a qualifying program within the meaning of paragraph (f)(2) 
of this section, including the certificates of completion, certificates 
of instruction, and outlines and course material. In the case of 
programs of more than one session, records must be maintained to verify 
each session of the program that is completed by each participant. 
Records required to be maintained under this paragraph must be retained 
by the qualifying sponsor for a period of six years following the end 
of the sponsor enrollment cycle in which the program is held.
    (2) Enrolled actuaries--(i) Qualifying program credits as a 
participant. To receive continuing professional education credit for 
completion of hours of continuing professional education under 
paragraph (f) of this section, an enrolled actuary must retain all 
certificates of completion evidencing completion of such hours for the 
three-year period following the end of the enrollment cycle in which 
the credits are earned.
    (ii) Qualifying program credits as an instructor, discussion 
leader, or speaker. To receive continuing professional education credit 
for completion of hours earned under paragraph (g)(2) of this section, 
an enrolled actuary must retain all certificates of instruction 
evidencing completion of such hours for the three-year period following 
the end of the enrollment cycle in which the credits are earned.
    (iii) Credit for publications. To receive continuing professional 
education credit for a publication under paragraph (g)(3) of this 
section, the following information must be maintained by the enrolled 
actuary for the three-year period following the end of the enrollment 
cycle in which the credits are earned:
    (A) The name of the publisher.
    (B) The title and author of the publication.
    (C) A copy of the publication.
    (D) The date of the publication.
    (E) The total credit hours earned, and the total core and non-core 
credit hours earned, and how many of those hours relate to ethics.
    (iv) Other credits. To receive continuing professional education 
credit for hours earned under paragraphs (g)(4) through (g)(7) of this 
section, an enrolled actuary must retain sufficient documentation to 
establish completion of such hours for the three-year period following 
the end of the enrollment cycle in which the credits are earned.
    (k) Waivers. (1) Waiver from the continuing professional education 
requirements for a given period may be granted by the Executive 
Director only under extraordinary circumstances, and upon submission of 
sufficient evidence that every effort was made throughout the 
enrollment cycle to participate in one or more qualifying programs that 
would have satisfied the continuing professional education 
requirements.
    (2) A request for waiver must be accompanied by appropriate 
documentation. The individual will be required to furnish any 
additional documentation or explanation deemed necessary by the 
Executive Director.
    (3) The individual will be notified by the Executive Director of 
the disposition of the request for waiver. If the waiver is not 
approved, and the individual does not otherwise satisfy the continuing 
professional education requirements within the allotted time, the 
individual will be placed on the roster of inactive enrolled 
individuals.
    (4) Individuals seeking to rely on a waiver of the continuing 
professional education requirements must receive the waiver from the 
Executive Director before filing an application for renewal of 
enrollment.
    (l) Failure to comply. (1) Compliance by an individual with the 
requirements of this part shall be determined by the Executive 
Director. * * *
    (2) The Executive Director may require any individual, by first 
class mail sent to his/her mailing address of record with the Joint 
Board, to provide copies of any records required to be maintained under 
this section. * * *
    (3) * * * A request for review and the reasons in support of the 
request must be filed with the Joint Board within 30 days of the date 
of the notice of failure to comply.
    (4) Inactive status--(i) Automatic placement on the inactive 
roster. To remain on the roster of active enrolled actuaries, an 
enrolled actuary must submit a timely application for renewal showing 
satisfaction of the requirements for reenrollment, including completion 
of the required continuing professional education hours, within the 
appropriate time frame. The Executive Director will move an enrolled 
actuary who does not submit such an application for reenrollment from 
the roster of enrolled actuaries to the roster of inactive enrolled 
actuaries as of April 1 following the March 1 due date for the 
application. However, if an enrolled actuary completes the required 
number of continuing professional education hours after the close of 
the enrollment cycle, submits an application for reenrollment, and is 
informed by the Executive Director before April 1st that the enrollment 
has been renewed, then the Executive Director will not move such 
individual to the roster of inactive enrolled actuaries at that time.
    (ii) Placement on the inactive roster after notice and right to 
respond. The Executive Director will move an enrolled actuary who does 
submit a timely application of renewal that shows timely completion of 
the required continuing professional education to the inactive roster 
only after giving the enrolled actuary 60 days to respond as described 
in paragraph (l)(1) of this section.
    (iii) Length on time on inactive roster. An individual may remain 
on the roster of inactive enrolled actuaries for a period up to three 
enrollment cycles from the date renewal would have been effective.
    (iv) Consequence of being on the inactive roster. An individual in 
inactive status will be ineligible to perform pension actuarial 
services as an enrolled actuary under ERISA and the Internal Revenue 
Code. During such time in inactive status or at any other time an 
individual is ineligible to perform pension actuarial services as an 
enrolled actuary, the individual shall not in any manner, directly or 
indirectly, indicate he or she is so enrolled, or use the term 
``enrolled actuary,'' the designation ``E.A.,'' or other form of 
reference to eligibility to perform pension actuarial services as an 
enrolled actuary.
    (v) Returning to active status. An individual placed in inactive 
status may return to active status by filing an application for renewal 
of enrollment (with the appropriate fee) and providing

[[Page 17773]]

evidence of the completion of all required continuing professional 
education hours and of satisfaction of any applicable requirements for 
qualifying experience under paragraph (l)(7) of this section. If an 
application for return to active status is approved, the individual 
will be eligible to perform services as an enrolled actuary effective 
with the date the notice of approval is mailed to that individual by 
the Executive Director.
    (5) Time for return to active enrollment. (i) An individual placed 
in inactive status must file an application for return to active 
enrollment, and satisfy the requirements for return to active 
enrollment as set forth in this section, within three enrollment cycles 
of being placed in inactive status. Otherwise, the name of such 
individual will be removed from the inactive enrollment roster and his/
her enrollment will terminate.
    (ii) For purposes of paragraph (l)(5)(i) of this section, an 
individual who is in inactive or retired status as of April 1, 2010, 
will be deemed to have been placed in inactive status on April 1, 2010.
    (6) An individual in inactive status may satisfy the requirements 
for return to active enrollment at any time during his/her period of 
inactive enrollment. If only completion of the continuing professional 
education requirement is necessary, the application for return to 
active enrollment may be filed immediately upon such completion. If 
qualifying experience is also required, the application for return to 
active enrollment may not be filed until the completion of both the 
continuing professional education and qualifying experience 
requirements set forth in this subsection. Continuing professional 
education credits applied to meet the requirements for reenrollment 
under this paragraph (l)(6) may not be used to satisfy the requirements 
of the enrollment cycle in which the individual has been placed back on 
the active roster.
    (7) Continuing professional education requirements for return to 
active enrollment from inactive status. (i) During the first inactive 
enrollment cycle; 36 hours of qualifying continuing professional 
education as set forth in paragraph (e)(2) of this section, without 
regard to paragraph (e)(2)(ii) or (e)(2)(iii) of this section, must be 
completed. Any hours of continuing professional education credit earned 
during the immediately prior enrollment cycle may be applied in 
satisfying this requirement.
    (ii) During the second inactive enrollment cycle; four-thirds of 
the qualifying continuing professional education requirements as set 
forth in paragraph (e)(2) of this section (that is, 48 hours), without 
regard to paragraph (e)(2)(ii) or (e)(2)(iii) of this section, plus 
eighteen months of certified responsible pension actuarial experience, 
must be completed since the start of the first inactive enrollment 
cycle. Any hours of continuing professional education credit earned 
during the first inactive enrollment cycle may be applied in satisfying 
this requirement.
    (iii) During the third inactive enrollment cycle: Five-thirds of 
the qualifying continuing professional education requirements as set 
forth in paragraph (e)(2) of this section, (that is, 60 hours), without 
regard to paragraph (e)(2)(ii) or (e)(2)(iii) of this section plus 
eighteen months of certified responsible pension actuarial experience, 
must be completed since the start of the second inactive enrollment 
cycle. Any hours of continuing professional education credit earned 
during the second inactive enrollment cycle may be applied in 
satisfying this requirement. No hours earned during the first inactive 
enrollment cycle may be applied in satisfying this requirement.
* * * * *
    (9) An individual who has certified in good faith that he/she has 
satisfied the continuing professional education requirements of this 
section will not be considered to be in non-compliance with such 
requirements on the basis of a program he/she has attended later being 
found inadequate or not in compliance with the requirements for 
continuing professional education. * * *
* * * * *
    (n) Verification. The Executive Director or his/her designee may 
request and review the continuing professional education records of an 
enrolled actuary, including programs attended, in a manner deemed 
appropriate to determine compliance with the requirements and standards 
for the renewal of enrollment as provided in this section. The 
Executive Director may also request and review the records of any 
qualifying sponsor in a manner deemed appropriate to determine 
compliance with the requirements of paragraphs (f)(3) and (j)(1) of 
this section.
    (o) Examples. The following examples illustrate the application of 
the rules of paragraph (l)(7) of this section and the effective date of 
an enrolled actuary's renewal:

    Example 1.  Individual E, who was initially enrolled before 
January 1, 2008, completes 12 hours of core continuing professional 
education credit and 24 hours of non-core continuing professional 
education credit between January 1, 2011, and December 31, 2013. E 
files a complete application for reenrollment on February 28, 2014. 
E's reenrollment is effective as of April 1, 2014.
    Example 2.  Individual F, who was initially enrolled before 
January 1, 2008, also completes 12 hours of core continuing 
professional education credit and 24 hours of non-core continuing 
professional education credit between January 1, 2011, and December 
31, 2013. However, F does not file an application for reenrollment 
until March 20, 2014. The Joint Board notifies F that it has granted 
F's application on June 25, 2014. Accordingly, effective April 1, 
2014, F is placed on the roster of inactive enrolled actuaries. F 
returns to active status as of June 25, 2014. F is ineligible to 
perform pension actuarial services as an enrolled actuary under 
ERISA and the Internal Revenue Code from April 1 through June 24, 
2014.
    Example 3.  Individual G, who was initially enrolled before 
January 1, 2008, completes only 8 hours of core continuing 
professional education credit and 24 hours of non-core continuing 
professional education credit between January 1, 2011, and December 
31, 2013. G completes another 6 hours of core continuing 
professional education on January 15, 2014, and files an application 
for return to active status on January 20, 2014. G's application 
shows the timely completion of 32 hours of continuing professional 
education plus the additional 4 hours of continuing professional 
education earned after the end of the enrollment cycle. The Joint 
Board notifies G that it has granted the application on April 20, 
2014. Accordingly, effective April 1, 2014, G is placed on the 
roster of inactive enrolled actuaries. G returns to active status as 
of April 20, 2014. G is ineligible to perform pension actuarial 
services as an enrolled actuary under ERISA and the Internal Revenue 
Code from April 1 through April 19, 2014. Of the 6 hours of 
continuing professional education earned by G on January 15, 2014, 
only 2 hours may be applied to the enrollment cycle that ends 
December 31, 2016.
    Example 4.  (i) Individual H, who was initially enrolled before 
January 1, 2008, completes 5 hours of core continuing professional 
education credit and 10 hours of non-core continuing professional 
education credit between January 1, 2011, and December 31, 2013. 
Accordingly, effective April 1, 2014, E is placed on the roster of 
inactive enrolled actuaries and is ineligible to perform pension 
actuarial services as an enrolled actuary under ERISA and the 
Internal Revenue Code.
    (ii) H completes 7 hours of core continuing professional 
education credit and 14 hours of noncore continuing professional 
education credit between January 1, 2014, and May 24, 2016. Because 
H has completed 12 hours of core continuing professional education 
and 24 hours of non-core continuing professional education during 
the last active enrollment period and the initial period when on 
inactive status, H has satisfied the requirements for reenrollment 
during the first inactive cycle. Accordingly, H may file an

[[Page 17774]]

application for return to active enrollment on May 24, 2016. If this 
application is approved, H will be eligible to perform pension 
actuarial services as an enrolled actuary under ERISA and the 
Internal Revenue Code, effective with the date of such approval.
    (iii) Because H used the 21 hours of continuing professional 
education credit earned after January 1, 2014, for return from 
inactive status, H may not apply any of these 21 hours of core and 
non-core continuing professional education credits towards the 
requirements for renewed enrollment effective April 1, 2017. 
Accordingly, H must complete an additional 36 hours of continuing 
professional education (12 core and 24 non-core) prior to December 
31, 2016, to be eligible for renewed enrollment effective April 1, 
2017.
    Example 5.  (i) The facts are the same as in Example 4 except H 
completes 2 hours of core continuing professional education credit 
and 8 hours of non-core continuing professional education credit 
between January 1, 2014, and December 31, 2016. Thus, because H did 
not fulfill the requirements for return to active status during his 
first inactive cycle, H must satisfy the requirements of paragraph 
(l)(7)(ii) of this section in order to return to active status.
    (ii) Accordingly, in order to be eligible to file an application 
for return to active status on or before December 31, 2019, H must 
complete an additional 38 hours of continuing professional education 
credit (of which at least 14 hours must consist of core subject 
matter) between January 1, 2017, and December 31, 2019, and have 18 
months of certified responsible pension actuarial experience during 
the period beginning on January 1, 2014.
    (iii) Note that the 5 hours of core continuing professional 
education credit and the 10 hours of non-core continuing 
professional education credit that H completes between January 1, 
2011, and December 31, 2013, are not counted toward H's return to 
active status and are also not taken into account toward the 
additional hours of continuing professional education credit that H 
must complete between January 1, 2017, and December 31, 2019, in 
order to apply for renewal of enrollment effective April 1, 2020.
    Example 6.  (i) The facts are the same as in Example 4 except H 
completes 2 hours of core continuing professional education credit 
and 8 hours of non-core continuing professional education credit 
between January 1, 2014, and December 31, 2016, and 12 hours of core 
continuing professional education credit and 24 hours of non-core 
continuing professional education credit between January 1, 2017, 
and December 31, 2019. Thus, because H did not fulfill the 
requirements for return to active status during his first or second 
inactive cycles, H must satisfy the requirements of paragraph 
(l)(7)(iii) of this section in order to return to active status.
    (ii) Accordingly, in order to be eligible to file an application 
for return to active status on or before December 31, 2022, H must 
complete an additional 24 hours of continuing professional education 
credit (of which, at least 8 hours must consist of core subject 
matter) between January 1, 2020 and December 31, 2022, and have at 
least 18 months of certified responsible pension actuarial 
experience during the period beginning on January 1, 2017.
    (iii) Note that the total of 15 hours of continuing professional 
education credit that E completes between January 1, 2011, and 
December 31, 2013, as well as the 10 hours of continuing 
professional education credit between January 1, 2014, and December 
31, 2016, are not counted toward H's return to active status and are 
not taken into account toward the additional hours of continuing 
professional education credit that H must complete between January 
1, 2020, and December 31, 2022, in order to be eligible to file an 
application for renewal of enrollment active status effective April 
1, 2023.
    Example 7. (i) Individual J, who was initially enrolled July 1, 
2012, completes 1 hour of core continuing professional education 
credit and 2 hours of non-core continuing professional education 
credit between January 1, 2012, and December 31, 2013. Accordingly, 
effective April 1, 2014, J is placed on the roster of inactive 
enrolled actuaries and is ineligible to perform pension actuarial 
services as an enrolled actuary under ERISA and the Internal Revenue 
Code.
    (ii) F completes 5 hours of core continuing professional 
education credit and 4 hours of non-core continuing professional 
education credit between January 1, 2014, and October 6, 2014. 
Because J did not complete the required 12 hours of continuing 
professional education (of which at least 6 hours must consist of 
core subject matter) during F's initial enrollment cycle, J is not 
eligible to file an application for a return to active enrollment on 
October 6, 2014, notwithstanding the fact that had J completed such 
hours between January 1, 2012, and December 31, 2013, J would have 
satisfied the requirements for renewed enrollment effective April 1, 
2014.
    (iii) Accordingly, J must complete an additional 24 hours of 
continuing professional education (of which at least 12 hours must 
consist of core subject matter) during his/her first inactive 
enrollment cycle before applying for renewal of enrollment.
    Example 8.  The facts are the same as in Example 7 except that J 
completes 17 hours of core continuing professional education credit 
and 16 hours of non-core continuing professional education credit 
between January 1, 2014, and February 12, 2015. Accordingly, because 
as of February 12, 2015, J satisfied the continuing professional 
education requirements as set forth in paragraph (e)(2) of this 
section without regard to paragraph (e)(2)(ii) thereof, J may file 
an application for return to active enrollment status on February 
12, 2015.

    (p) With the exception of paragraphs (e)(1) and (f)(3)(iii) of this 
section, this section applies to the enrollment cycle beginning January 
1, 2011, and all subsequent enrollment cycles.


Sec.  901.12  [Removed]

0
Par. 6. Section 901.12 is removed.


Sec.  901.13  [Redesignated as Sec.  901.12]

0
Par. 7. Section 901.13 is redesignated as Sec.  901.12.

0
Par. 8. Newly redesignated Sec.  901.12 is amended by revising the 
section heading and paragraphs (a), (b), (d), and (e) to read as 
follows:


Sec.  901.12  Eligibility for enrollment.

    (a) In general. An individual applying to be an enrolled actuary 
must fulfill the experience requirement of paragraph (b) of this 
section, the basic actuarial knowledge requirement of paragraph (c) of 
this section, and the pension actuarial knowledge requirement of 
paragraph (d) of this section.
    (b) Qualifying experience. Within the 10-year period immediately 
preceding the date of application, the applicant shall have completed 
either--
    (1) A minimum of 36 months of certified responsible pension 
actuarial experience; or
    (2) A minimum of 60 months of certified responsible actuarial 
experience, including at least 18 months of certified responsible 
pension actuarial experience.
* * * * *
    (d) Pension actuarial knowledge. (1) The applicant shall 
demonstrate pension actuarial knowledge by one of the following:
    (i) Joint Board pension examination. Successful completion, within 
the 10-year period immediately preceding the date of the application, 
to a score satisfactory to the Joint Board, of an examination 
prescribed by the Joint Board in actuarial mathematics and methodology 
relating to pension plans, including the provisions of ERISA relating 
to the minimum funding requirements and allocation of assets on plan 
termination.
    (ii) Organization pension examinations. Successful completion, 
within the 10-year period immediately preceding the date of the 
application, to a score satisfactory to the Joint Board, of one or more 
proctored examinations which are given by an actuarial organization and 
which the Joint Board has determined cover substantially the same 
subject areas, have at least a comparable level of difficulty, and 
require at least the same competence as the Joint Board pension 
examination referred to in paragraph (d)(1)(i) of this section.
    (2) For purposes of this section, the date of successful completion 
of an examination is generally the date a candidate sits for the 
examination, provided that the candidate receives a passing grade on 
that examination. However, an applicant who sat for an

[[Page 17775]]

examination prior to the effective date of these regulations will be 
deemed to have sat for such examination on the effective date.
    (e) Form; fee. An applicant who wishes to take an examination 
administered by the Joint Board under paragraph (c)(1) or (d)(1) of 
this section shall file an application on a form prescribed by the 
Joint Board. Such application shall be accompanied by payment in the 
amount set forth on the application form. The amount represents a fee 
charged to each applicant for examination and is designed to cover the 
costs for the administration of the examination. The fee shall be 
retained whether or not the applicant successfully completes the 
examination or is enrolled.
* * * * *

0
Par. 9. Section 901.20 is amended as follows:
0
A. Revising paragraphs (b), (d), (e), (f), and (g).
0
B. Redesignating paragraph (h) as paragraph (k), and adding new 
paragraph (h).
0
C. Adding and reserving paragraph (i).
0
D. Adding new paragraphs (j) and (l).
    The revisions and additions read as follows:


Sec.  901.20  Standards of performance of actuarial services.

* * * * *
    (b) Professional duty. (1) An enrolled actuary shall perform 
actuarial services only in a manner that is fully in accordance with 
all of the duties and requirements for such persons under applicable 
law and consistent with relevant generally accepted standards for 
professional responsibility and ethics.
    (2) An enrolled actuary shall not perform actuarial services for 
any person or organization which he/she believes, or has reasonable 
grounds to believe, may utilize his/her services in a fraudulent manner 
or in a manner inconsistent with law.
* * * * *
    (d) Conflicts of interest. (1) Except as provided in paragraph 
(d)(2) of this section, an enrolled actuary shall not perform actuarial 
services for a client if the representation involves a conflict of 
interest. A conflict of interest exists if--
    (i) The representation of one client will be directly adverse to 
another client; or
    (ii) There is a significant risk that the representation of one or 
more clients will be materially limited by the enrolled actuary's 
responsibilities to another client, a former client, or by a personal 
interest of the enrolled actuary.
    (2) Notwithstanding the existence of a conflict of interest under 
paragraph (d)(1) of this section, the enrolled actuary may represent a 
client if--
    (i) The enrolled actuary reasonably believes that he or she will be 
able to provide competent and diligent representation to each affected 
client;
    (ii) The representation is not prohibited by law; and
    (iii) Each affected client waives the conflict of interest and 
gives informed consent at the time the existence of the conflict of 
interest is known by the enrolled actuary.
    (e) Assumptions, calculations and recommendations. (1) The enrolled 
actuary shall exercise due care, skill, prudence and diligence when 
performing actuarial services under ERISA and the Internal Revenue 
Code. In particular, in the course of preparing a report or certificate 
stating actuarial costs or liabilities, the enrolled actuary shall 
ensure that--
    (i) Except as mandated by law, the actuarial assumptions are 
reasonable individually and in combination, and the actuarial cost 
method and the actuarial method of valuation of assets are appropriate;
    (ii) The calculations are accurately carried out and properly 
documented; and
    (iii) The report, any recommendations, and any supplemental advice 
or explanation relative to the report reflect the results of the 
calculations.
    (2) An enrolled actuary shall include in any report or certificate 
stating actuarial costs or liabilities, a statement or reference 
describing or clearly identifying the data, any material inadequacies 
therein and the implications thereof, and the actuarial methods and 
assumptions employed.
    (f) Due diligence. (1) An enrolled actuary must exercise due 
diligence--
    (i) In preparing or assisting in the preparation of, approving, and 
filing tax returns, documents, affidavits, and other papers relating to 
the Department of the Treasury, the Department of Labor, the Pension 
Benefit Guaranty Corporation, or any other applicable Federal or State 
entity;
    (ii) In determining the correctness of oral or written 
representations made by the enrolled actuary to the Department of the 
Treasury, the Department of Labor, the Pension Benefit Guaranty 
Corporation, or any other applicable Federal or State entity; and
    (iii) In determining the correctness of oral or written 
representations made by the enrolled actuary to clients.
    (2) An enrolled actuary advising a client to take a position on any 
document to be filed with the Department of the Treasury, the 
Department of Labor, the Pension Benefit Guaranty Corporation, or any 
other applicable Federal or State entity (or preparing or signing such 
a return or document) generally may rely in good faith without 
verification upon information furnished by the client. The enrolled 
actuary may not, however, ignore the implications of information 
furnished to, or actually known by, the enrolled actuary, and must make 
reasonable inquiries if the information as furnished appears to be 
incorrect, inconsistent with an important fact or another factual 
assumption, or incomplete.
    (g) Solicitations regarding actuarial services. An enrolled actuary 
may not in any way use or participate in the use of any form of public 
communication or private solicitation related to the performance of 
actuarial services containing a false, fraudulent, or coercive 
statement or claim, or a misleading or deceptive statement or claim. An 
enrolled actuary may not make, directly or indirectly, an uninvited 
written or oral solicitation of employment related to actuarial 
services if the solicitation violates Federal or State law, nor may 
such person employ, accept employment in partnership form, corporate 
form, or any other form, or share fees with, any individual or entity 
who so solicits. Any lawful solicitation related to the performance of 
actuarial services made by or on behalf of an enrolled actuary must 
clearly identify the solicitation as such and, if applicable, identify 
the source of the information used in choosing the recipient.
    (h) Prompt disposition of pending matters. An enrolled actuary may 
not unreasonably delay the prompt disposition of any matter before the 
Internal Revenue Service, the Department of Labor, the Pension Benefit 
Guaranty Corporation, or any other applicable Federal or State entity.
    (i) [Reserved].
    (j) Return of client's records. (1) In general, an enrolled actuary 
must, at the request of a client, promptly return any and all records 
of the client that are necessary for the client to comply with his or 
her legal obligations. The enrolled actuary may retain copies of the 
records returned to a client. The existence of a dispute over fees 
generally does not relieve the enrolled actuary of his or her 
responsibility under this section. Nevertheless, if applicable State 
law allows or permits the retention of a client's records by an 
enrolled actuary in the case of a dispute over fees for services 
rendered, the enrolled actuary

[[Page 17776]]

need only return those records that must be attached to the client's 
required forms under ERISA and the Internal Revenue Code. The enrolled 
actuary, however, must provide the client with reasonable access to 
review and copy any additional records of the client retained by the 
enrolled actuary under State law that are necessary for the client to 
comply with his or her obligations under ERISA and the Internal Revenue 
Code.
    (2) For purposes of this section, records of the client include all 
documents or written or electronic materials provided to the enrolled 
actuary, or obtained by the enrolled actuary in the course of the 
enrolled actuary's representation of the client, that preexisted the 
retention of the enrolled actuary by the client. The term ``records of 
the client'' also includes materials that were prepared by the client 
or a third party (not including an employee or agent of the enrolled 
actuary) at any time and provided to the enrolled actuary with respect 
to the subject matter of the representation. The term ``records of the 
client'' also includes any return, claim for refund, schedule, 
affidavit, appraisal or any other document prepared by the enrolled 
actuary, or his or her employee or agent, that was presented to the 
client with respect to a prior representation if such document is 
necessary for the taxpayer to comply with his or her current 
obligations under ERISA and the Internal Revenue Code. The term 
``records of the client'' does not include any return, claim for 
refund, schedule, affidavit, appraisal or any other document prepared 
by the enrolled actuary or the enrolled actuary's firm, employees or 
agents if the enrolled actuary is withholding such document pending the 
client's performance of its contractual obligation to pay fees with 
respect to such document.
* * * * *
    (l) The rules of this section apply to all actuarial services and 
related acts performed on or after May 2, 2011.

0
Par. 10. Section 901.31 is amended by revising paragraphs (a) and (c) 
to read as follows:


Sec.  901.31  Grounds for suspension or termination of enrollment.

    (a) Failure to satisfy requirements for enrollment. The enrollment 
of an actuary may be terminated if it is found that the actuary did not 
satisfy the eligibility requirements set forth in Sec.  901.11 or Sec.  
901.12.
* * * * *
    (c) Disreputable conduct. The enrollment of an actuary may be 
suspended or terminated if it is found that the actuary has, at any 
time after he/she applied for enrollment, engaged in any conduct set 
forth in Sec.  901.12(f) or other conduct evidencing fraud, dishonesty, 
or breach of trust. Such other conduct includes, but is not limited to, 
the following:
* * * * *

0
Par. 11. Section 901.32 is amended by revising the last sentence to 
read as follows:


Sec.  901.32  Receipt of information concerning enrolled actuaries.

    * * * If any other person has information of any such violation, 
he/she may make a report thereof to the Executive Director.

0
Par. 12. Section 901.47 is amended by revising the last sentence to 
read as follows:


Sec.  901.47  Transcript.

    * * * Copies of exhibits introduced at the hearing or at the taking 
of depositions will be supplied to parties upon the payment of a 
reasonable fee (31 U.S.C. 9701).

0
Par. 13. Section 901.72 is added to read as follows:


Sec.  901.72  Additional rules.

    The Joint Board may, in notice or other guidance of general 
applicability, provide additional rules regarding the enrollment of 
actuaries.

    Approved: March 2, 2011.
Carolyn Zimmerman,
Chairman, Joint Board for the Enrollment of Actuaries.
[FR Doc. 2011-7573 Filed 3-29-11; 11:15 am]
BILLING CODE 4810-25-P