1. The Role of The PRSA Actuary Jim Murphy FSAI Society of Actuaries Morning Seminar PRSAs – From theory to practice 15 October 2002 jim.murphy@lifestrat.ie Jim Murphy FSAI Society of Actuaries Morning Seminar PRSAs – From theory to practice 15 October 2002 jim.murphy@lifestrat.ie

2. What’s in store …

3. Agenda n Scope of Responsibilities n The Role in Practice

4. Agenda n Scope of Responsibilities - Product Certification - Product & Remuneration Disclosure - Annual Review - Whistle-blowing n The Role in Practice

5. PRSA Framework n Legal Form of Providers: - life insurer - credit institution - investment firm n Consider: - Pensions (Amendment) Act 2002 - Regulations - Guidance

6. Agenda n Scope of Responsibilities - Product Certification - Product & Remuneration Disclosure - Annual Review - Whistle-blowing n The Role in Practice

7. Product Certification Article 94(1)(b): “An application for approval of a PRSA product under this section shall be accompanied by a certificate provided by a PRSA actuary and two directors of the applicant stating that it is the opinion of the actuary and those directors that the product complies with the requirements of this Part and any regulations made under section 103(2).”

8. Product Definition Article 102(1): “… an arrangement to which a PRSA provider is a party and under which it agrees, in consideration of payments to it, in the form of charges, to receive moneys from or on behalf of contributors and invest those moneys in a manner nominated by the contributor or the PRSA provider.”

9. Arrangement n What constitutes the contract? - terms and conditions & application form - other product literature e.g. brochure? n Terms & conditions - ownership of assets - benefit payment - contributions - etc… n Charges

10. Charges n Only % of contribution and/or fund allowed n Variations allowed: - by product - distribution method - payment method - investments held - duration inforce - amount of contribution or fund n Definition of “charges” includes list of included and excluded costs e.g. rounding, stamp duty …

11. Agenda n Scope of Responsibilities - Product Certification - Product & Remuneration Disclosure - Annual Review - Whistle-blowing n The Role in Practice

12. Disclosure n Pre-sale (PDC) n Post-sale (SRP) n Scheme Transfers

13. Disclosure Regulations #1 n Formal role for PRSA actuary in relation to: - PDC - SRP - Scheme Transfers

14. Meeting with Department n Proposed change to drop PRSA actuary role in scheme transfers leaving: - PDC - SRP

15. Disclosure Regulations #2 n No formal role for PRSA actuary (Pensions Board code of conduct to require PRSA providers to comply with guidance)

16. Disclosure Confused?

17. Agenda n Scope of Responsibilities - Product Certification - Product & Remuneration Disclosure - Annual Review - Whistle-blowing n The Role in Practice

18. Annual Determination Article 119(2): PRSA Actuary certifies that charges deducted: n comply with Part X of the Act n are consistent with product documentation

19. Annual Determination Article 119(1): PRSA Actuary shall “… determine [and specify] the extent to which the … [PRSA] Provider has complied with this Part [of the Act] and the regulations made thereunder”

20. Provider Responsibilities n Product Related Issues n Operational Issues

21. Provider Responsibilities n Product Related Issues: - Marketing & Sale of Products - Unapproved Products

22. Provider Responsibilities n Product Related Issues: - Marketing & Sale of Products - Unapproved Products n Operational Issues: - Reporting - Disclosure - Procedural - Miscellaneous

23. Product Related Issues Marketing & Sale of Products- Pensions Board Code of Conduct - Article 110 restrictions - Advertising Regulations (no rules on day one) Unapproved Products- Not allowed! - Rules on use of PRSA label

24. Operational Issues Reporting- Regular Pension Board Returns Disclosure- Furnishing of information - Content of information Procedural- Investments - Early repayment of assets - etc. Miscellaneous- custodian account - TPA agreements? - notification of material facts

25. Agenda n Scope of Responsibilities - Product Certification - Product & Remuneration Disclosure - Annual Review - Whistle-blowing n The Role in Practice

26. Whistle-blowing n Mandatory reporting: - misappropriation of funds - illegal activities - employer non-compliance with mandatory access requirements n Voluntary reporting n Catch all provision

27. Scope of Responsibilities Considerable responsibilities: n Product Certification n Product & Remuneration Disclosure n Annual Review n Whistle-blowing

28. Agenda n Scope of Responsibilities - Product Certification - Product & Remuneration Disclosure - Annual Review - Whistle-blowing n The Role in Practice

29. The Role in Practice n Relevant Experience n Relationship with provider

30. The Role in Practice n Relevant Experience - Practising Certificates - Possible overlap with Appointed Actuary

31. The Role in Practice n Relevant Experience - Practising Certificates - Possible overlap with Appointed Actuary n Relationship with provider - clear understanding of responsibilties - access to information - model letter of appointment - guidance?

32. Summary n Scope of Responsibilities: - Product Certification - Product & Remuneration Disclosure - Annual Review - Whistle-blowing n The Role in Practice: - Relevant Experience - Relationship with Provider n New opportunities and challenges for the Society

33. Summary n Scope of Responsibilities: - Product Certification - Product & Remuneration Disclosure - Annual Review - Whistle-blowing n The Role in Practice: - Relevant Experience - Relationship with Provider n New opportunities and challenges for the Society

34. Summary n Scope of Responsibilities: - Product Certification - Product & Remuneration Disclosure - Annual Review - Whistle-blowing n The Role in Practice: - Relevant Experience - Relationship with Provider n New opportunities and challenges for the Society

35. PRSAs – from theory to practice