Source: https://www.federalregister.gov/articles/2011/03/31/2011-7573/regulations-governing-the-performance-of-actuarial-services-under-the-employee-retirement-income
Timestamp: 2016-05-02 23:16:44
Document Index: 419143377

Matched Legal Cases: ['art 901', 'ART 901', 'art 901', '§ 901', '§ 901', '§ 901', '§ 901', '§ 901', '§ 901', '§ 901', '§ 901', '§ 901', '§ 901', '§ 901', '§ 901', '§ 901', '§ 901', '§ 901', '§ 901', '§ 901', '§ 901', '§ 901']

Federal Register | Regulations Governing the Performance of Actuarial Services Under the Employee Retirement Income Security Act of 1974
A Rule by the Joint Board for Enrollment of Actuaries on
-17776 (15 pages)
Shorter URL: https://federalregister.gov/a/2011-7573 Action
Regulations Governing the Performance of Actuarial Services Under the Employee Retirement Income Security Act of 1974 5 actions from September 21st, 2009 to March 31st, 2011
74 FR 48030
Public Hearing--2/25/2010
Final Action Completed by TD 9517
This document contains final regulations under section 3042 of the Employee Retirement Income Security Act of 1974 (88 Stat. 829), 93 (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.
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 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.
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 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 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 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.
Under these regulations, whether a program qualifies as a formal program is 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.
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 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.
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 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.
The principal author of these regulations is Michael P. Brewer, IRS 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 Back to Top
PART 901—REGULATIONS GOVERNING THE PERFORMANCE OF ACTUARIAL SERVICES UNDER THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974 Back to Top
Paragraph 1. The authority citation for part 901 continues to read in part as follows:
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.
§ 901.0 [Amended]
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.
Par. 3. Section 901.1 is amended by:
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”.
B. Adding new paragraphs (i), (j) and (k) to read as follows:
§ 901.1 Definitions.
§ 901.10 [Amended]
Par. 4. Section 901.10 is amended by:
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”.
B. Adding a second sentence to paragraph (a) to read “A reasonable non-refundable fee may be charged for each application for enrollment filed.”
Par. 5. Section 901.11 is amended by:
A. Revising the first sentence of paragraph (a).
B. Revising paragraphs (c) and (d).
C. Revising paragraphs (e) introductory text, (e)(1) and (e)(2)(i).
D. Revising the last sentence of paragraph (e)(2)(ii).
E. Adding new paragraphs (e)(2)(iv), (v), and (vi).
F. Removing paragraph (e)(3).
G. Revising paragraphs (f)(1) and (f)(1)(i).
H. Revising the second sentence of paragraph (f)(1)(ii), and paragraph (f)(1)(iv).
I. Revising paragraph (f)(2).
J. Adding paragraph (f)(3).
K. Revising paragraph (g).
L. Removing the last two sentences of paragraph (h)(2).
M. Removing paragraph (l).
N. Redesignating paragraphs (i), (j), and (k) as paragraphs (j), (k), and (l), respectively.
O. Adding and reserving new paragraph (i).
P. Revising newly redesignated paragraphs (j) and (k).
Q. Revising the first sentences of newly redesignated paragraphs (l)(1) and (l)(2), and the second sentence of newly redesignated paragraph (l)(3).
R. Revising newly redesignated paragraphs (l)(4), (l)(5), (l)(6), and (l)(7), and the first sentence of newly redesignated paragraph (l)(9).
S. Revising paragraph (n).
T. Adding new paragraphs (o) and (p).
§ 901.11 Enrollment procedures.
(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 matter; the remainder may be non-core subject matter.
(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 than1/3of 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.
(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 to at least three participants and the instructor is in the physical presence of at least three other individuals engaged in substantive pension service.
(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 is core or non-core. No credit may be earned for hours attributable to any content that is neither core nor non-core.
(i) Achieving a passing score on the Joint Board pension examination, as described in § 901.12(d)(1)(i), administered under this part during the applicable enrollment cycle; and
(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 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.
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.
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.
(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 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.
(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.
(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.
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.
§ 901.12 [Removed]
Par. 6. Section 901.12 is removed.
§ 901.13 [Redesignated as § 901.12]
Par. 7. Section 901.13 is redesignated as § 901.12.
Par. 8. Newly redesignated § 901.12 is amended by revising the section heading and paragraphs (a), (b), (d), and (e) to read as follows:
§ 901.12 Eligibility for enrollment.
(2) A minimum of 60 months of certified responsible actuarial experience, including at least 18 months of certified responsible pension actuarial experience.
(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 examination prior to the effective date of these regulations will be deemed to have sat for such examination on the effective date.
Par. 9. Section 901.20 is amended as follows:
A. Revising paragraphs (b), (d), (e), (f), and (g).
B. Redesignating paragraph (h) as paragraph (k), and adding new paragraph (h).
C. Adding and reserving paragraph (i).
D. Adding new paragraphs (j) and (l).
§ 901.20 Standards of performance of actuarial services.
(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 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.
Par. 10. Section 901.31 is amended by revising paragraphs (a) and (c) to read as follows:
§ 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 § 901.11 or § 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 § 901.12(f) or other conduct evidencing fraud, dishonesty, or breach of trust. Such other conduct includes, but is not limited to, the following:
Par. 11. Section 901.32 is amended by revising the last sentence to read as follows:
§ 901.32 Receipt of information concerning enrolled actuaries.
Par. 12. Section 901.47 is amended by revising the last sentence to read as follows:
§ 901.47 Transcript.
Par. 13. Section 901.72 is added to read as follows:
§ 901.72 Additional rules.