1. CIA Annual Meeting LOOKING BACK…focused on the future

2. CIA Annual Meeting Session 6309: Role of the Pension Actuary LOOKING BACK…focused on the future Moderator: David A. Short Speakers: Randall J. Dutka Patrick F. Flanagan Moderator: David A. Short Speakers: Randall J. Dutka Patrick F. Flanagan

3. CIA Annual Meeting Session 6309: Role of the Pension Actuary LOOKING BACK…focused on the future Mandate of Task Force Focus on professional integrity in work of the pension actuary in light of Enron, Morris Review, regulatory concerns etc. Independent of CIA initiatives related to funding standards Times have changed – what was good enough in 1995 is not good enough today Mandate of Task Force Focus on professional integrity in work of the pension actuary in light of Enron, Morris Review, regulatory concerns etc. Independent of CIA initiatives related to funding standards Times have changed – what was good enough in 1995 is not good enough today

4. CIA Annual Meeting Session 6309: Role of the Pension Actuary LOOKING BACK…focused on the future Recommendation 2-1 Amend or annotate Rule 7 of Professional Conduct to clarify authorization required for disclosure of confidential information. Recommendation 2-1 Amend or annotate Rule 7 of Professional Conduct to clarify authorization required for disclosure of confidential information.

5. CIA Annual Meeting Session 6309: Role of the Pension Actuary LOOKING BACK…focused on the future Recommendation 2-2 Strengthen Rule 5 of Professional Conduct to improve disclosure of conflicts of interest to indirect users of reports. Recommendation 2-2 Strengthen Rule 5 of Professional Conduct to improve disclosure of conflicts of interest to indirect users of reports.

6. CIA Annual Meeting Session 6309: Role of the Pension Actuary LOOKING BACK…focused on the future Recommendation 2-3 Amend Rules or SOP to require disclosure in report if the actuary or actuary’s firm is not financially or organizationally independent of the client or plan. Recommendation 2-3 Amend Rules or SOP to require disclosure in report if the actuary or actuary’s firm is not financially or organizationally independent of the client or plan.

7. CIA Annual Meeting Session 6309: Role of the Pension Actuary LOOKING BACK…focused on the future Recommendation 3-1 Amend SOP to require disclosure in report of: -client’s involvement in selection of assumptions/methods -relevant investment/benefit/funding policies -justification for each assumption. Recommendation 3-1 Amend SOP to require disclosure in report of: -client’s involvement in selection of assumptions/methods -relevant investment/benefit/funding policies -justification for each assumption.

8. CIA Annual Meeting Session 6309: Role of the Pension Actuary LOOKING BACK…focused on the future Recommendation 3-2 Develop SOP for conversion values including guidance on assumptions concerning future employment and wage increases. Recommendation 3-2 Develop SOP for conversion values including guidance on assumptions concerning future employment and wage increases.

9. CIA Annual Meeting Session 6309: Role of the Pension Actuary LOOKING BACK…focused on the future Recommendation 3-3 Develop SOP for surplus attribution on plan wind-up Recommendation 3-3 Develop SOP for surplus attribution on plan wind-up

10. CIA Annual Meeting Session 6309: Role of the Pension Actuary LOOKING BACK…focused on the future Recommendation 3-4 CIA to adopt recommendations in report of Task Force on Public Policy Principles of Pension Plan Funding concerning: - report’s reflecting the Funder’s funding objectives - guidance on measurement and reporting in relation to funding objectives - guidance on selection of assumptions – best estimate and PfADs. Recommendation 3-4 CIA to adopt recommendations in report of Task Force on Public Policy Principles of Pension Plan Funding concerning: - report’s reflecting the Funder’s funding objectives - guidance on measurement and reporting in relation to funding objectives - guidance on selection of assumptions – best estimate and PfADs.

11. CIA Annual Meeting Session 6309: Role of the Pension Actuary LOOKING BACK…focused on the future Recommendation 3-5 CIA to consult with CICA to clarify their expectations re. actuary’s involvement in pension expense calculations, in particular: - clarify actuary’s role re. actuarial cost methods and other technical rules - strengthen requirement for dialogue between actuary and auditor Recommendation 3-5 CIA to consult with CICA to clarify their expectations re. actuary’s involvement in pension expense calculations, in particular: - clarify actuary’s role re. actuarial cost methods and other technical rules - strengthen requirement for dialogue between actuary and auditor

12. CIA Annual Meeting Session 6309: Role of the Pension Actuary LOOKING BACK…focused on the future Recommendation 4-1 Amend SOP to introduce concept of Independent Review reporting and establish criteria for such reporting. Recommendation 4-1 Amend SOP to introduce concept of Independent Review reporting and establish criteria for such reporting.

13. CIA Annual Meeting Session 6309: Role of the Pension Actuary LOOKING BACK…focused on the future Recommendation 4-2 Amend SOP to require disclosure of whether an external report of a review actuary is an Independent Review. Recommendation 4-2 Amend SOP to require disclosure of whether an external report of a review actuary is an Independent Review.

14. CIA Annual Meeting Session 6309: Role of the Pension Actuary LOOKING BACK…focused on the future Recommendation 4-3 Amend SOP (or educational note) to provide more guidance for review work including: - minimum standards for external peer review - items to be included in terms of reference - disclosure if terms of reference don’t meet minimum standards. Recommendation 4-3 Amend SOP (or educational note) to provide more guidance for review work including: - minimum standards for external peer review - items to be included in terms of reference - disclosure if terms of reference don’t meet minimum standards.

15. CIA Annual Meeting Session 6309: Role of the Pension Actuary LOOKING BACK…focused on the future Recommendation 6-1 PPFR Committee to review Insurance Financial Reporting SOPs with a view to developing parallel standards with respect to: - reporting justification for each assumption - use of best estimate assumptions and reporting of margins and PfADs - conducting and reporting tests of adequacy of funding Recommendation 6-1 PPFR Committee to review Insurance Financial Reporting SOPs with a view to developing parallel standards with respect to: - reporting justification for each assumption - use of best estimate assumptions and reporting of margins and PfADs - conducting and reporting tests of adequacy of funding

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