Reg-159704-03

48030

Federal Register / Vol. 74, No. 181 / Monday, September 21, 2009 / Proposed Rules

actions are considered FAA-approved if they
are approved by the State of Design Authority
(or their delegated agent). You are required
to assure the product is airworthy before it
is returned to service.
(3) Reporting Requirements: For any
reporting requirement in this AD, under the
provisions of the Paperwork Reduction Act
(44 U.S.C. 3501 et seq.), the Office of
Management and Budget (OMB) has
approved the information collection
requirements and has assigned OMB Control
Number 2120–0056.
Related Information
(h) Refer to MCAI Ageˆncia Nacional de
Aviac
¸a˜o Civil (ANAC) Brazilian
Airworthiness Directive AD No.: 2009–09–
01, dated September 3, 2009, and Phenom by
Embraer Service Bulletin No. 500–55–0001,
dated July 24, 2009, for related information.
Issued in Kansas City, Missouri, on
September 15, 2009.
Scott A. Horn,
Acting Manager, Small Airplane Directorate,
Aircraft Certification Service.
[FR Doc. E9–22642 Filed 9–18–09; 8:45 am]
BILLING CODE 4910–13–P

JOINT BOARD FOR THE
ENROLLMENT OF ACTUARIES
20 CFR Part 901
[REG–159704–03]
RIN 1545–BC82

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

srobinson on DSKHWCL6B1PROD with PROPOSALS

AGENCY: Joint Board for the Enrollment
of Actuaries.
ACTION: Notice of proposed rulemaking.
SUMMARY: This document contains
proposed amendments to 20 CFR part
901 relating to the enrollment of
actuaries under section 3042 of the
Employee Retirement Income Security
Act of 1974 (ERISA). The proposed
amendments would update the
eligibility requirements for performing
actuarial services for ERISA-covered
employee pension benefit plans,
including the continuing education
requirements, and the standards for
performing such actuarial services. The
proposed amendments would affect
employee pension benefit plans and the
actuaries providing actuarial services to
those plans.
DATES: Written or electronic comments
must be received by November 20, 2009.
ADDRESSES: Send written comments to:
CC:PA:LPD:PR (REG–159704–03), Room
5203, Internal Revenue Service, PO Box
7604, Ben Franklin Station, Washington,
DC 20044. Submissions may be hand-

VerDate Nov<24>2008

18:48 Sep 18, 2009

Jkt 217001

delivered Monday through Friday
between the hours of 8 a.m. and 4 p.m.
to CC:PA:LPD:PR (REG–159704–03),
Courier’s Desk, Internal Revenue
Service, 1111 Constitution Avenue,
NW., Washington, DC or sent
electronically via the Federal
eRulemaking Portal at http://
www.regulations.gov (IRS REG–159704–
03).
FOR FURTHER INFORMATION CONTACT:
Patrick McDonough, Executive Director,
Joint Board for the Enrollment of
Actuaries, (202) 622–8229 (not a tollfree number).
SUPPLEMENTARY INFORMATION:
Paperwork Reduction Act
The collections of information
referenced in this notice of proposed
rulemaking were previously 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, relating to Enrolled
Actuaries under Employee Retirement
Income Security Act of 1974, published
on September 7, 1988, in the Federal
Register (53 FR 34484). There are no
proposals for substantive changes to this
collection of information.
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 assigned by the Office of
Management and Budget.
Books or records relating to a
collection of information must be
retained as long as their contents may
become material in the administration
of any internal revenue law. Generally,
tax returns and tax return information
are confidential, as required by 26
U.S.C. 6103.
Background
This document contains proposed
amendments to 20 CFR Part 901 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

PO 00000

Frm 00018

Fmt 4702

Sfmt 4702

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 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. Comprehensive
regulations regarding section 3042 were
last issued in 1988 (53 FR 34484). The
Joint Board has determined that the
regulations need to be updated to reflect
changes in the law and in industry
practice. In addition to these proposed
regulations, final regulations relating to
user fees for the initial enrollment and
reenrollment as an enrolled actuary
were published in the Federal Register
on December 21, 2007 (72 FR 72606).
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).
The RFI specifically requested
comments as to whether, and to what
extent, changes should be made to the
regulations in the following five areas:
1. Procedures and conditions for
enrollment and reenrollments;
2. Continuing professional education
(CPE) requirements;
3. Waivers of the CPE requirements;
4. Types of enrollment statuses
(active, inactive, and retired); and
5. Standards of conduct.
Eight comments were received.
The current regulations prescribe
various rules regarding the enrollment
and reenrollment of actuaries. Section
901.13 of the regulations provides that
an individual applying for enrollment
must satisfy requirements for: (1)
Qualifying experience; (2) basic
actuarial knowledge; and (3) pension
actuarial knowledge. Basic actuarial
knowledge may be demonstrated by
passing a Joint Board examination (or an
examination acceptable to the Joint
Board) regarding basic actuarial
mathematics and methodology, or by
earning a degree pertaining to actuarial
mathematics from an accredited college.
Pension actuarial knowledge must be
demonstrated by passing a Joint Board
examination (or an examination
acceptable to the Joint Board) in
actuarial mathematics related to pension
plans.
Under section 901.11, an enrolled
actuary must reenroll once every three
years. To qualify for reenrollment an
actuary must complete a minimum of 36

E:\FR\FM\21SEP1.SGM

21SEP1

srobinson on DSKHWCL6B1PROD with PROPOSALS

Federal Register / Vol. 74, No. 181 / Monday, September 21, 2009 / Proposed Rules
hours of continuing education credit
within the preceding three year period.1
Of these 36 hours, at least one-half must
consist of core subject matter, which is
subject matter directly related to the
performance of actuarial services under
ERISA or the Internal Revenue Code
(Code). The remaining hours may
consist of non-core subject matter. The
regulations provide examples of both
core and non-core subject matter. The
regulations provide that the Executive
Director of the Joint Board may review
the CPE records of an enrolled actuary
to verify compliance with these rules.
The regulations also provide that the
continuing education must be provided
as part of a ‘‘qualifying program’’
conducted by a ‘‘qualifying sponsor.’’ A
qualifying program is (1) a ‘‘formal
program’’ (which requires the
attendance of at least three individuals
engaged in substantive pension service),
(2) a correspondence or individual
study program, or (3) a program
utilizing teleconferencing. A qualifying
sponsor is an accredited educational
institution, an organization recognized
by a State licensing body, or an
organization recognized by the Joint
Board under a sponsor agreement in
effect for a given enrollment cycle. A
qualifying sponsor must ensure that the
CPE program satisfies various
requirements regarding subject matter
and administration, including
recordkeeping. A separate provision
applies to the recordkeeping
requirements for the enrolled actuary.
In addition to attending CPE
programs, an enrolled actuary may earn
CPE credits by serving as an instructor
or speaker at a CPE program, publishing
articles on topics directly related to the
CPE requirements, serving on a Joint
Board advisory committee, participating
in the preparation of Joint Board
examinations, passing examinations
sponsored by recognized organizations,
or by passing a Joint Board pension law
actuarial examination. These alternative
means for earning CPE credits are
subject to various requirements and
limitations.
In the event an enrolled actuary
applies for renewal but fails to comply
with the applicable requirements, the
regulations provide that the enrolled
actuary shall be notified of his or her
failure and given an opportunity to
provide additional information. If the
enrolled actuary fails to provide any
additional information (or fails to apply
for reenrollment) the actuary will be
placed in inactive status for a period of
1 The regulations also include transitional rules
for reenrollment cycles prior to 1993. This summary
refers to the rules currently applicable.

VerDate Nov<24>2008

18:23 Sep 18, 2009

Jkt 217001

three years (beginning on the date that
renewal would have been effective) and
will be ineligible to perform services as
an enrolled actuary during this time. An
individual placed in inactive status
must file an application for renewal and
satisfy the requirements for renewal
within three years or his enrollment will
terminate. If an individual’s enrollment
is terminated, it can only be
reestablished by satisfying the
requirements for initial enrollment.
The regulations also provide that an
individual may request placement in an
inactive retirement status during which
time the actuary will be ineligible to
perform services as an enrolled actuary.
An individual placed in this status may
be reinstated by completing the required
CPE credits for the applicable period.
Section 901.20 of the regulations
prohibits an enrolled actuary from
performing actuarial services under
various circumstances including when
the actuary is not qualified to perform
the service, where the actuary has
reasonable grounds to believe his or her
services will be used in a fraudulent
manner, or where there is a conflict of
interest. The section also requires that
an enrolled actuary must exercise due
care, skill, and diligence in providing
his or her pension actuarial services and
proper utilization of the enrolled
actuary designation.
Explanation of Provisions
The submitted comments and the
related proposed changes to the
regulations may be divided into the five
categories of the RFI.
A. Procedures for Enrollment and
Reenrollment
Various comments were received
regarding the materials covered by the
enrolled actuary examinations. Several
comments supported broadening the
scope of the material to include matters
unrelated to defined benefit plans, such
as the funding of post-retirement
medical and life insurance benefits
within the meaning of Code sections
419 and 419A. To the extent that an
enrolled actuary may need to practice
before the IRS in these areas, one
comment suggested that an enrolled
actuary should be permitted to work
together with a qualified health actuary.
In contrast, another comment suggested
focusing the examinations exclusively
on pension actuarial issues under
ERISA and the Code. Some comments
called for a stronger emphasis on the
selection of actuarial assumptions. One
such comment acknowledged that the
subject is not easily tested, but made
suggestions as to how this could be
done.

PO 00000

Frm 00019

Fmt 4702

Sfmt 4702

48031

Another comment proposed
eliminating requirements for the
examinations to cover specific materials
and instead have the regulations grant
the Joint Board the authority and
flexibility to prescribe relevant and
current topics.
There were also suggestions regarding
the process and form of testing. One
comment suggested that focusing each
examination question on a single
concept (instead of multiple concepts as
is done currently) would enable a
candidate to avoid losing credit for an
entire question if he/she responds
correctly to all but one of the concepts
being tested. It was also suggested that
the regulations allow more flexibility in
the number of exams and that they
clarify any time limit for their
completion.
One comment recommended the use
of computer-based testing and other
emerging alternative testing procedures,
and coordination of changes in the Joint
Board examinations with related
examinations offered by recognized
organizations.
There was general agreement among
the comments in keeping the current
qualifying experience requirement
unchanged although one comment
suggested that the regulations require
that an applicant’s actuarial experience
be certified by an enrolled actuary.
No changes are made under the
proposed regulations to the materials
covered by either the basic actuarial
examination or to the examination for
pension actuarial knowledge. The Joint
Board believes that the provisions of the
current regulations regarding the general
form and structure of the examinations,
as updated from time to time, are
adequate.
The proposed regulations, however,
would require that the pension actuarial
examination must be completed within
the ten-year period immediately
preceding the date of application for
initial enrollment. The Joint Board
believes such a requirement is needed
because of the frequent changes in
pension law and a need for an enrolled
actuary to have current knowledge of
pension requirements.2 On the other
hand, because the material in the basic
actuarial examination is generally
mathematical in nature and is not
affected by changes in pension law, a
similar rule for the basic actuarial
examination would not apply.
With respect to computer-based
testing, the Joint Board acknowledges
2 This rule would be applied prospectively.
Accordingly, the successful completion of a
pension actuarial examination prior to the effective
date of this regulation will be recognized for ten
years after such effective date.

E:\FR\FM\21SEP1.SGM

21SEP1

48032

Federal Register / Vol. 74, No. 181 / Monday, September 21, 2009 / Proposed Rules

srobinson on DSKHWCL6B1PROD with PROPOSALS

that new technologies can serve many
uses. The Joint Board believes, however,
that the language in the current
regulations would not preclude the use
of computer-based testing and does not
believe it is necessary to amend the
regulations to specify the format for
taking examinations.
With respect to qualifying experience,
the proposed regulations would require
that all actuarial and pension actuarial
experience be certified in writing by
individuals with knowledge of the
individual’s experience. If the
individual’s supervisor is not an
enrolled actuary, the pension actuarial
experience must be certified by both the
supervisor and an enrolled actuary with
knowledge of the individual’s pension
experience. As in the current
regulations, the qualifying experience
must have been completed within the
last 10 years before the application for
enrollment.
B. CPE Requirements
Several comments were received
regarding the distinction between core
and non-core subject matter. One
comment suggested that the distinction
between core and non-core subject
matter be eliminated for purposes of
meeting CPE requirements as the
distinction does not serve a useful
purpose in a rapidly evolving financial
marketplace and regulatory
environment. The comment added that,
assuming these core/non-core categories
were kept, additional guidance should
be provided as to what constitutes core
and non-core credit subject matter.
Other comments suggested that the
list of core subject matter be expanded
to include such topics as pension
accounting, Code sections 419, 419A
and 420, risk theory, and finance.
Another comment specifically
supported adding pension accounting,
but objected to counting investment
topics as core topics. Another comment
recommended including various
additional topics in an expanded list of
acceptable non-core topics such as
defined contribution plans, Social
Security and Medicare benefits, pension
valuation software programming, other
accounting, risk management and new
emerging topics in actuarial practice.
Another comment recommended
replacing the core/non-core
classification with three new categories:
(1) Retirement plan rules under ERISA
and the Code (including, but not limited
to, sections 401 through 420), (2)
funding issues in relation to defined
benefit plans, and (3) actuarial ethics.
This comment also suggested requiring
at least 45 hours of CPE credit (with a
minimum of three hours in funding

VerDate Nov<24>2008

18:23 Sep 18, 2009

Jkt 217001

issues and in actuarial ethics) and
granting the Joint Board the authority to
designate additional mandatory areas of
CPE. One comment recommended that
the definition of ‘‘core’’ subject matter
should continue to be focused on
pension actuarial services under ERISA
and the Code and opposed any
expansion of the definition of core
subject matter.
Some comments suggested
distinguishing between CPE credits
required early in an actuary’s career,
where core courses may be necessary to
help cement the actuary’s
understanding of actuarial principles,
and credits needed later in an actuary’s
career. One comment suggested, for
example, that 18 hours of core CPE
credit be required for the first two
enrollment cycles and that 12 hours of
core credit be required in subsequent
enrollment cycles. It was also suggested
that a minimum of three hours of ethics
be required.
Many comments, particularly from
sponsors of CPE programs, requested
flexibility in the use of the web and
other alternatives to formal meetings.
For example, some suggested that
computer-based self-study or distance
learning programs and webcasts should
be included as qualifying CPE programs.
A number of comments sought
additional guidance from the Joint
Board regarding the use of webcasts and
self-study programs to earn CPE credits.
The issues raised in this regard included
the need for appropriate safeguards and
mechanisms to validate participation by
the actuary. In recognition that future
technological advances are almost
certain to occur, another comment
recommended that the regulations be
revised to allow a qualifying sponsor to
apply to the Joint Board for approval to
use those technologies. The comment
also suggested that the regulations
specifically give the Joint Board the
authority to permit the use of those
emerging technologies, with acceptance
of the technology being communicated
via a public announcement without
requiring the Joint Board to further
update the regulations.
One comment recommended
permitting actuaries to attest in their
professional capacities to their
completion of continuing education
credit, and the establishment of an
appropriate audit process to oversee
compliance with the rules. The
comment further recommended that the
Joint Board undertake random audits of
CPE records to ensure compliance with
the attestation requirement. Similarly,
another comment recommended an
enrolled actuary should be required to
certify that he/she has satisfied certain

PO 00000

Frm 00020

Fmt 4702

Sfmt 4702

CPE requirements and to provide
information regarding whether or not
he/she has been disciplined or is under
disciplinary review by any professional
body.
One comment suggested that the
requirement that a formal program be
attended by at least three individuals
engaged in substantive pension service
may be satisfied, in the case of programs
viewed simultaneously at multiple
locations via teleconference, web cast,
conference call or other similar
technology, if the total combined
audience at all locations contains at
least three such individuals.
Several comments recommended
various electronic means to retain
records and to streamline the
application process. One comment
recommended that a qualifying sponsor
be required to keep electronic copies of
the session materials, but make them
accessible to the Joint Board should they
need to be reviewed or audited for
content. Another comment
recommended that the Joint Board
provide for on-line renewal of
enrollment and an on-line process for an
actuary to respond to an audit of his/her
CPE credits. A third comment
recommended that all records be
maintained electronically and that CPE
credit hours be provided and stored
electronically, enabling the Joint Board
to have access to the credit hours earned
by actuaries at all times and reducing
the volume of hard copy recordkeeping.
One comment recommended
extending the enrollment cycle to 5
years with an increase in the required
CPE credits to 60 hours, including a
minimum of 8 hours in each year of the
cycle. Another comment suggested that
the current CPE requirement (36 credit
hours over a three year cycle) is
appropriate, with some possible
refinements such as either reducing the
credits that could be earned for each
hour as a presenter and increasing the
current limit on such credits as a
portion of total CPE; allowing CPE
credits as a co-author (if not the primary
author); or withholding session credit to
an attendee for inattentive or disruptive
conduct.
One comment suggested that the
regulations should provide guidance on
renewal of approval for qualifying
sponsors. There were a few comments
that suggested changing the enrollment
cycle for qualifying sponsors so as not
to be coterminous with the enrolled
actuary enrollment cycle or to increase
the number of years in the sponsor
enrollment cycle. Another comment
suggested the regulations be amended to
allow the Joint Board to periodically
publish a list of qualifying sponsors in

E:\FR\FM\21SEP1.SGM

21SEP1

srobinson on DSKHWCL6B1PROD with PROPOSALS

Federal Register / Vol. 74, No. 181 / Monday, September 21, 2009 / Proposed Rules
order to facilitate a search for programs
that are eligible for CPE credits.
The Joint Board continues to believe
that an important thrust of CPE should
be core subject matter that is directly
related to pension actuarial services
under ERISA and the Code, an area in
which an enrolled actuary must
maintain minimum competencies at all
times. The Joint Board also believes that
there are other relevant non-core topics
that enhance the knowledge of enrolled
actuaries and keep them current in
matters related to the performance of
pension actuarial services. The
proposed regulations would provide a
revised definition of ‘‘core’’ subject
matter which the Joint Board believes
will be helpful in distinguishing
between core and non-core subject
matter. The lists of core and non-core
subject matter are generally unchanged,
but the proposed regulations would
provide that all materials included on
the syllabi of any of the pension
actuarial examinations offered by the
Joint Board during the current and
immediately preceding enrollment
cycles would constitute core subject
matter. The Joint Board also invites
further comments in this area.
With respect to CPE programs, the
proposed regulations would clarify the
permissible forms of qualifying
programs. The regulations would also
retain the use of alternative means for
completion of CPE, but continue to limit
the portion of total CPE that may be
earned under these alternative
approaches. The regulations would also
add a provision that awards CPE credits
to a co-author of a publication or a
person listed as a major contributor to
a publication.
The proposed regulations would also
clarify the responsibilities of program
sponsors by requiring that those who
submit requests to the Executive
Director to be recognized as qualifying
sponsors include sufficient information
in their requests to establish that their
programs would satisfy the applicable
requirements for qualifying programs.
The Joint Board agrees that new
technologies allow enrolled actuaries
and qualifying sponsors more flexibility
in their choices of form and delivery of
CPE programs and should be reflected
when granting CPE credits. However,
new technologies also raise new
challenges regarding verification of
attendance and completion of CPE
under certain programs. Therefore, the
proposed regulations would allow
qualifying programs to include both
formal programs as well as
correspondence or individual study
programs (including audio and/or video
taped programs) and teleconferencing

VerDate Nov<24>2008

18:23 Sep 18, 2009

Jkt 217001

(including web casts) provided that the
qualifying program meets certain
requirements with regard to verification
of attendance and measurement of
completion.
The Joint Board also agrees that
recordkeeping provisions under the
current regulations should be updated.
The proposed regulations would amend
the recordkeeping requirements to place
more reliance on qualifying sponsors to
maintain records of the course content
since they generally maintain records of
that content in any event. The enrolled
actuaries will now be required only to
retain certificates of completion and/or
instruction as evidence of satisfaction of
CPE requirements. In addition, the
proposed regulations would expressly
allow the Joint Board to request CPE
records from the enrolled actuary and
the qualifying sponsor. The regulations
do not reflect any changes in the
method used to provide information to
the office of the Executive Director.
However, the Board is willing to
consider web-based applications or
other technology for this information in
the future.
With respect to the renewal cycle and
required CPE credits, the Joint Board
continues to believe that the current
three-year renewal period is
appropriate. The Board, however,
proposes to delay the start date for the
renewal cycle for qualifying sponsors by
one year after the renewal cycle for
enrolled actuaries in order to ease the
administrative demands on the
Executive Director and his staff, and to
facilitate renewals by qualifying
sponsors.
The proposed regulations would also
retain the current requirement for a total
of 36 hours of CPE (half of which must
be core subject matter) for the initial
three-year enrollment renewal cycle, for
individuals who renew on a timely
basis. Recognizing, however, that
experienced actuaries generally do not
need to focus on core topics as much as
newly enrolled actuaries, the proposed
regulations would reduce the number of
core CPE credits required after the
enrolled actuary’s initial enrollment
renewal from 18 required core hours to
12 required core hours. The Joint Board
also believes that enrolled actuaries
should maintain high professional
standards and thus proposes a new
requirement that a minimum of two
hours of core CPE be allocated to ethical
standards in each enrollment cycle.
Topics that would meet this
requirement include (but are not limited
to) discussions of professional codes of
conduct, professional responsibilities,
and any of the topics addressed in

PO 00000

Frm 00021

Fmt 4702

Sfmt 4702

48033

section 901.20 of these proposed
regulations.
The Joint Board believes that formal
programs should continue to play a
prominent role in fulfilling CPE
requirements because of the additional
learning opportunities that occur in
face-to-face interactions with other
enrolled actuaries. Therefore, no change
is proposed to the current requirement
that a formal program must have at least
three individuals in attendance who are
engaged in substantive pension service.
Furthermore, the proposed regulations
would add a new requirement that a
minimum of one-third of the required
total CPE credits must be in the form of
formal programs.
The proposed regulations would also
retain current limits on the maximum
number of CPE credits that can be
obtained under alternative CPE
programs, such as authoring published
articles (25 percent), as a percentage of
total CPE per enrollment cycle. Under
the proposed regulations, however,
college courses will no longer be
available as an alternative program for
purposes of fulfilling CPE requirements
(unless they meet the requirements of a
qualifying program) due to the practical
difficulties in evaluating course
curricula and the qualifications of the
instructors. Despite the elimination of
the specific list of conditions that would
support a waiver, circumstances such as
extended active military duty will
continue to constitute strong evidence
of the type of extraordinary
circumstances that would justify a
waiver.
C. Waivers of the CPE Requirements
One comment suggested expanding
the list of conditions for which a waiver
from CPE requirements may be granted
to include parental leave. Another
comment recommended that
applications for a waiver of the CPE
requirements be accepted during the
normal enrollment renewal process,
subject to the Joint Board’s discretion to
accept late filings. A third comment did
not perceive problems with the current
waiver process and standards. There
were no other specific recommendations
regarding this issue except in
conjunction with proposals regarding
changes in enrollment status.
The Joint Board believes that it is
essential for practicing actuaries to keep
their knowledge current, particularly
given the frequent changes in pension
law, court decisions, and other factors
that affect an enrolled actuary’s practice.
Accordingly, and in light of the
expanded varieties of acceptable CPE
programs, the proposed regulations
would eliminate the list of reasons for

E:\FR\FM\21SEP1.SGM

21SEP1

48034

Federal Register / Vol. 74, No. 181 / Monday, September 21, 2009 / Proposed Rules

srobinson on DSKHWCL6B1PROD with PROPOSALS

which a CPE waiver may be granted and
provide instead that a waiver from the
CPE requirements may be granted only
under extraordinary circumstances and
only upon submission of evidence that
every effort was made during the entire
renewal cycle to complete such
requirements. Despite the elimination of
the specific list of conditions that would
support a waiver, circumstances such as
extended active military duty will
continue to constitute strong evidence
of the type of extraordinary
circumstances that would justify a
waiver.
D. Enrollment Status
Several comments were directed to
the status for ‘‘inactive retirement’’
which may be elected by an actuary.
One comment suggested that the Joint
Board allow for some flexibility in the
renewal process in order to reduce the
need for individuals to request inactive
retirement status and to ensure a
minimal period of disruption of
actuarial services to plans and
employers. For example, it was
recommended that any CPE credit hours
completed between December 31 (or the
end of the enrollment period by which
CPE credits must be earned for that
period) and the date the application for
renewal is filed be permitted to be used
to satisfy the CPE requirement for
renewal of enrollment effective April 1.
Thus, the comment stated that an
enrolled actuary who files an
application for renewal after March 1
due to delayed completion of the CPE
requirement should be eligible to
perform services as an enrolled actuary
30 days after the application filing date
unless notified otherwise by the Joint
Board. However, these delayed CPE
credits would not be permitted to be
applied to another enrollment cycle.
Under the current regulations, an
actuary in inactive retirement status is
ineligible to perform services as an
enrolled actuary, but the actuary may be
reinstated by completing the ‘‘required
continuing professional education
credits for the applicable enrollment
cycle’’ regardless of how long the
actuary was inactive. Several comments
stated that this status, and the
requirements for reinstatement, were
unclear. Some comments suggested that
inactive retirement status be available
for no more than three consecutive
three-year enrollment cycles, but that if
the individual has been retired for less
than three three-year enrollment cycles,
the actuary would be allowed to ‘‘back
fill’’ any missing CPE requirements.
One comment recommended that the
regulations be revised to extend inactive
status to six years (or a maximum of two

VerDate Nov<24>2008

18:23 Sep 18, 2009

Jkt 217001

three-year enrollment cycles). The
comment stated that three years is too
short since an enrolled actuary often
leaves the workforce for child-rearing or
other reasons, and should not be
discouraged from resuming his/her
career. Another comment recommended
that the regulations be clarified to
specify more clearly the CPE
requirements for reinstatement as of
various points of time during the
following three-year cycle, and the
relationship of those CPE requirements
with the requirements for ongoing
renewal after reinstatement. One
comment suggested special catch-up
requirements where an individual
would have to ‘‘back fill’’ any missing
CPE requirements (for example, 108
hours of CPE credits would be required
for an actuary who had missed two
enrollment renewal cycles, with 36
credits required for each inactive
enrollment cycle plus 36 credits
required for the enrollment cycle
immediately preceding the date on
which the individual returns to active
status). The comment suggested that any
individual who fails to complete the
necessary back fill would need to follow
current reenrollment procedures. The
comment further stated that, depending
on the circumstances, a waiver of some
CPE requirements may be permitted for
an enrolled actuary going from inactive
to active status.
The Joint Board agrees that the
current rules relative to the different
inactive statuses warrant simplification.
The proposed regulations would limit
enrollment statuses to only two
categories, ‘‘active’’ or ‘‘inactive,’’ with
special provisions for reinstatement
depending on the length of the period
during which an enrolled actuary is in
inactive status and for those situations
where an actuary’s status is terminated
for cause. An enrolled actuary who
timely renews his/her enrollment would
be in active status. An enrolled actuary
who fails to meet requirements for
timely renewal of enrollment would be
in inactive status. While in inactive
status, an enrolled actuary would be
prohibited from performing pension
actuarial services under ERISA and the
Code.
The Joint Board also believes that the
longer an actuary has been in inactive
status, the less likely it is that he/she
has kept up with current developments
or had the current work experience
necessary to competently function as an
enrolled actuary. The proposed
regulations would increase the CPE
requirements and/or add experience
requirements for reenrollment for
actuaries in inactive status, with more
stringent requirements applying to those

PO 00000

Frm 00022

Fmt 4702

Sfmt 4702

who have been inactive for a longer
period of time. Under the proposed
regulations, an individual who applies
for reenrollment during his or her first
inactive enrollment cycle would need to
complete 36 hours of CPE (including
CPE credits from the immediately
preceding enrollment cycle) in order to
qualify for reenrollment. An individual
who applies during the second inactive
enrollment cycle would need to
complete 48 hours of CPE (counting
only those credits earned during the
first and second inactive enrollment
cycles) and must also have 18 months
of certified responsible pension
actuarial experience since the start of
the first inactive cycle. An individual
who applies during the third active
enrollment cycle would need to
complete 60 hours of CPE (counting
only those credits earned during the
second and third inactive enrollment
cycles) and have 18 months of certified
responsible pension actuarial
experience since the start of the second
inactive cycle. The proposed regulations
present some examples to illustrate
these changes.
Furthermore, the proposed
regulations would limit the time that an
enrolled actuary can be in inactive
status and remain eligible to apply for
reenrollment. If the enrolled actuary
does not qualify and apply for
reenrollment after being in inactive
status for three enrollment cycles, he or
she would be placed in terminated
status and would have to meet the
requirements for initial enrollment
(including the applicable examination
requirements) in order to be reinstated
as an enrolled actuary.
Notwithstanding these general rules
for reenrollment from inactive status,
any application for reenrollment from
termination status due to disciplinary
reasons would be subject to special
consideration by the Executive Director.
An individual placed in inactive status
prior to the effective date of the final
regulations would be deemed to have
been placed in inactive status on that
date and thus considered to be in his/
her first inactive enrollment cycle on
that date for purposes of determining
the requirements for a return to active
status.
E. Standards of Conduct
One comment states that the Joint
Board has not been very active in
investigating and disciplining enrolled
actuaries whose performance does not
meet applicable standards. One
comment suggested that the Joint Board
consider utilizing the Actuarial Board
for Counseling and Discipline as an
independent contractor to investigate

E:\FR\FM\21SEP1.SGM

21SEP1

srobinson on DSKHWCL6B1PROD with PROPOSALS

Federal Register / Vol. 74, No. 181 / Monday, September 21, 2009 / Proposed Rules
complaints. Alternatively, it was
recommended that the Joint Board
either require an enrolled actuary to
become a member of a professional
actuarial organization as a condition of
enrollment (thereby subjecting the
member to the Actuarial Code of
Professional Conduct (Code of Conduct)
to which all the major actuarial
organizations in the U.S. and Canada
subscribe), or incorporate the Code of
Conduct into the regulations.
Another comment stated that, unlike
other professionals, an enrolled actuary
is not compelled to operate within
certain standards by the underlying
threat that failure to do so will result in
the loss of his/her license to practice in
the profession. Even if an enrolled
actuary is a member of an actuarial
organization and subject to that
organization’s disciplinary procedures,
this comment suggested that the Joint
Board not rely on these organizations in
this area, but rather that the Joint Board
more actively utilize its current
authority under ERISA to supervise and
evaluate the provision of actuarial
services and to discipline enrolled
actuaries. This comment also suggested
that the Joint Board periodically publish
information regarding the nature and
types of complaints received, the
number of actuaries disciplined and the
nature of the discipline. This comment
indicated that publicizing such
information would reassure the public
that complaints are being acted upon
and encourage compliance with the
applicable standards.
Another comment recommended that
the Board coordinate with other
actuarial or governmental bodies, for
example, the IRS or PBGC, so that if any
other body finds that an enrolled
actuary has violated the standards of
conduct, performance or practice
relating to the performance of actuarial
services, including all applicable
regulations and revenue rulings, the
respective body will refer the offending
individual to the Joint Board for
possible suspension or termination of
his/her enrollment.
One comment reiterated a concern
that actuaries who do not have
significant credentials in the health tax
area should not be encouraged to engage
in unqualified practice under the Code,
or in an area where they do not meet the
qualification standards in accordance
with the Code of Conduct. The
commentator recommended that the
Joint Board outline those areas where
the enrolled actuary may rely on the
expertise of another actuary and any
qualifications needed for those other
actuaries as appropriate.

VerDate Nov<24>2008

18:23 Sep 18, 2009

Jkt 217001

One comment stated that the
standards of performance of actuarial
services set forth in current regulations
are adequate. The comment suggested,
however, in the event the Board were to
decide that these standards need to be
expanded, that any differences from the
Code of Conduct be kept to a minimum
or, wherever possible, any expanded
regulatory standards should incorporate
the applicable parts of the Code of
Conduct.
In light of the responses to the RFI
regarding actuarial standards of
performance, the proposed regulations
would clarify existing provisions in this
area and add some new provisions.
Specifically, the proposed regulations
would add a new general standard that
would require enrolled actuaries to
perform actuarial services in accordance
with all applicable laws and the
relevant standards of professional
responsibility and, as under the current
regulations, require that enrolled
actuaries not perform any actuarial
services where those services may be
used in a fraudulent manner. The
proposed regulations would also
provide that an enrolled actuary must
report any material violation of this
section by another enrolled actuary to
the Executive Director of the Joint
Board. For example, an enrolled actuary
that replaces another enrolled actuary as
a plan’s actuary and discovers that the
previous actuary had signed a Schedule
B that listed plan contributions that the
previous actuary knew had not been
made would be required to report this
violation to the Executive Director.
The proposed regulations would also
modify the rules regarding conflicts of
interest. The regulations currently
provide that in any situation in which
an enrolled actuary has a conflict of
interest with respect to the performance
of actuarial services, the actuary shall
not perform such services until full
disclosure of the conflict has been made
to the affected parties. The proposed
regulations would add that such
disclosure must be made in writing and
that the affected parties must agree in
writing to the enrolled actuary
performing the services. The proposed
regulations would also provide that the
actuary must reasonably conclude that
his or her ability to act impartially is not
impaired by the conflict and the
performance of such services is not
prohibited by law.
The current regulations also provide
that an enrolled actuary must exercise
due care, skill, prudence, and diligence
to ensure that all actuarial assumptions
are reasonable in the aggregate and that
all calculations are accurately carried
out. To reflect changes made in the law

PO 00000

Frm 00023

Fmt 4702

Sfmt 4702

48035

made by the Pension Protection Act of
2006, Public Law 109–280, the proposed
regulations would provide that an
enrolled actuary must exercise sufficient
due care, diligence, skill, and prudence
as is required to ensure that all actuarial
assumptions are reasonable individually
and in combination. The proposed
regulations would also require that all
calculations not only be accurately
carried out but also properly
documented.
The proposed regulations would also
expressly expand the due diligence
requirement into other areas. For
example, the proposed regulations
would require that an enrolled actuary
must exercise due diligence in
preparing documents to be filed with
Federal and State entities and in
determining the correctness of oral and
written representations to those entities
and to clients. This section of the
proposed regulations follows section
10.22(a) of the regulations governing
practice before the IRS (Circular 230)
except to include other agencies where
enrolled actuaries typically file
documents or make representations in
connection with the performance of
pension actuarial services.
The proposed regulations would also
include other provisions similar to those
in Circular 230 regarding solicitations of
employment. For example, the current
regulations provide that an enrolled
actuary shall not advertise his or her
status as an enrolled actuary in any
solicitation related to the performance
of actuarial services and shall not
employ or share fees with any
individual who so solicits. The
proposed regulations would modify this
prohibition by adding a rule similar to
that in section 10.30(a)(1) of Circular
230 by providing that an enrolled
actuary may not use any form of public
or private solicitation containing a false,
fraudulent, or misleading claim. Also, as
provided in section 10.30(a)(2) of
Circular 230, the proposed regulations
would provide that an enrolled actuary
may not make uninvited solicitations of
employment if the solicitation violates
Federal or State law and any lawful
solicitations must clearly identify the
solicitation as such and, if applicable,
identify the source of the information
used in choosing the recipient of the
solicitation.
The proposed regulations would also
include provisions similar to those in
Circular 230 regarding the prompt
disposition of pending matters and the
return of client records, except the
Circular 230 rules would be modified
for purposes of these regulations to
reflect the fact that enrolled actuaries
deal with government entities in

E:\FR\FM\21SEP1.SGM

21SEP1

48036

Federal Register / Vol. 74, No. 181 / Monday, September 21, 2009 / Proposed Rules

addition to the IRS. Thus, as under
section 10.23 of Circular 230, the
proposed regulations would provide
that an enrolled actuary may not
unreasonably delay the prompt
disposition of any matter before the IRS,
but the proposed regulations would
extend the rule for these purposes to
matters before the Department of Labor,
the PBGC and other applicable Federal
and State entities. Similarly, the
proposed regulations would adopt
provisions similar to those in section
10.27 of Circular 230 regarding the
return and retention of client’s records,
but they would define ‘‘records of the
client’’ for these purposes to include
documents related to legal obligations in
addition to Federal tax obligations. The
provisions of these proposed regulations
would not modify the Circular 230
regulations but would apply rules to
enrolled actuaries in addition to those
already applicable under Circular 230.
The Joint Board believes that the
current structure and procedures for the
disciplining of enrolled actuaries are
adequate and consistent with Federal
statutes and so is not proposing any
changes to the existing regulations in
this regard. The Joint Board emphasizes
that anyone, including other members of
the profession and plan officials and
participants, can make referrals to the
Executive Director regarding any
suspicious activity or conduct that may
warrant further investigation or
discipline. The Joint Board is also
considering in a separate action
amending the application forms for
enrollment and renewal to require
additional information that may be
relevant to standards of performance,
including any record of violations of the
law or prior misconduct, and requests
comments in that regard.

srobinson on DSKHWCL6B1PROD with PROPOSALS

Proposed Effective/Applicability Date
These regulations are proposed to
generally apply 30 days after the date
these regulations are published as final
regulations in the Federal Register.
However, section 901.11 regarding the
enrollment of actuaries would apply to
the enrollment cycle beginning January
1, 2011, and ending December 31, 2013,
and to all subsequent enrollment cycles.
Special Analyses
It has been determined that this notice
of proposed rulemaking is not a
significant regulatory action as defined
in Executive Order 12866. Therefore, a
regulatory assessment is not required. 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, and therefore the
Regulatory Flexibility Act (5 U.S.C.

VerDate Nov<24>2008

18:23 Sep 18, 2009

Jkt 217001

chapter 6) does not apply. This notice
of proposed rulemaking will be
submitted to the Chief Counsel for
Advocacy of the Small Business
Administration for comment on its
impact on small business.
Comments and Requests for Public
Hearing
Before these proposed regulations are
adopted as final regulations,
consideration will be given to any
written (a signed original and eight (8)
copies) or electronic comments that are
submitted timely to the IRS. The Joint
Board specifically requests comments
on the clarity of the proposed
regulations and how they may be made
easier to understand. All comments will
be available for public inspection and
copying. A public hearing will be
scheduled if requested in writing by any
person that timely submits written
comments. If a public hearing is
scheduled, notice of the date, time, and
place for the public hearing will be
published in the Federal Register.
Drafting Information
The principal author of these
regulations is Carolyn Zimmerman, IRS
Employee Plans, Tax Exempt and
Government Entities Division. 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.
Proposed Amendments to the
Regulations
Accordingly, 20 CFR part 901 is
proposed to be amended as follows:
PART 901—REGULATIONS
GOVERNING THE PERFORMANCE OF
ACTUARIAL SERVICES UNDER THE
EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974
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.

Par. 2. Section 901.0 is amended by
revising the second sentence to read as
follows:
§ 901.0

Scope.

* * * Subpart A of this part sets forth
definitions and eligibility to perform
actuarial services; subpart B of this part

PO 00000

Frm 00024

Fmt 4702

Sfmt 4702

sets forth rules governing the enrollment
of actuaries; subpart C of this part sets
forth standards of performance to which
enrolled actuaries must adhere; subpart
D of this part sets forth rules applicable
to suspension and termination of
enrollment; and subpart E of this part
sets forth general provisions.
Par. 3. Section 901.1 is amended by:
A. Adding new paragraph (d)(5).
B. Revising paragraph (g).
C. Adding new paragraphs (i), (j) and
(k).
The revisions and additions read as
follows:
§ 901.1

Definitions.

*

*
*
*
*
(d) * * *
(5) Selection of assumptions.
*
*
*
*
*
(g) Enrolled actuary means an
individual who has satisfied the
standards and qualifications set forth in
this part and who has been approved by
the Joint Board for the Enrollment of
Actuaries (the Joint Board), or its
designee, to perform actuarial services
required under ERISA or the
regulations.
*
*
*
*
*
(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 is 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.
Par. 4. Section 901.10 is amended by
revising paragraph (a) to read as follows:
§ 901.10

Application for enrollment.

(a) Form. As a requirement for
enrollment, an applicant shall file with
the Executive Director of the Joint Board
(the Executive Director) a properly
executed application on a form or forms
specified by the Joint Board, and shall
agree to comply with these regulations
and any other guidance as required by
the Joint Board. A reasonable nonrefundable fee may be charged for each
application for enrollment filed.
*
*
*
*
*

E:\FR\FM\21SEP1.SGM

21SEP1

Federal Register / Vol. 74, No. 181 / Monday, September 21, 2009 / Proposed Rules
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)
introductory text, 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).
The revisions and additions read as
follows:

srobinson on DSKHWCL6B1PROD with PROPOSALS

§ 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. The Executive Director
shall maintain rosters of all actuaries
who are duly enrolled under this part
and of all individuals whose enrollment
has been suspended or terminated, or
who are in inactive status. The
Executive Director may publish any or
all of these 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) All enrolled actuaries must file an
application for renewal of enrollment on
the prescribed form between October 1,

VerDate Nov<24>2008

18:23 Sep 18, 2009

Jkt 217001

2010, and March 1, 2011, and between
October 1 and March 1 of every third
year thereafter.
(2) The effective date of renewal of
enrollment for individuals who file
complete renewal applications by
March 1 is the April 1 immediately
following the date of application. The
effective date of renewal of enrollment
for individuals who file complete
renewal applications after March 1 is
the date the notice of renewal is mailed
to that individual by the Joint Board.
(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 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
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.
(ii) An individual who receives initial
enrollment in 2008 or 2009 must satisfy
the following requirements by December
31, 2010: Those enrolled during 2008
must complete 24 hours of continuing
education; those enrolled during 2009
must complete 12 hours of continuing
education. 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), credit
will be awarded for continuing
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 education
requirements until the next enrollment
cycle, but must file a timely application
for renewal.
(2) For renewal of enrollment effective
April 1, 2014, and every third year
thereafter. (i) A minimum of 36 hours of
continuing 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.

PO 00000

Frm 00025

Fmt 4702

Sfmt 4702

48037

(ii) * * * For purposes of this
paragraph (e), credit will be awarded for
continuing 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 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 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) As part of the core subject matter
required for each enrollment cycle, an
individual must complete a minimum of
two hours of continuing education
credit relating to ethical standards.
(f) Qualifying continuing education—
(1) In general. To qualify for continuing
education credit an enrolled actuary
must complete his/her hours of
continuing 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 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 education credit required
for an enrollment cycle must be
obtained by attending in person 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

E:\FR\FM\21SEP1.SGM

21SEP1

srobinson on DSKHWCL6B1PROD with PROPOSALS

48038

Federal Register / Vol. 74, No. 181 / Monday, September 21, 2009 / Proposed Rules

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 applicable enrollment cycles.
For this purpose, the applicable
enrollment cycles are 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 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 qualified
sponsor, within the meaning of
paragraph (f)(3) of this section;
(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
those who have successfully completed
the program; and
(H) Provides a certificate of
instruction, within the meaning of
paragraph (f)(3)(v) of this section, to
those who have served as instructors,
discussion leaders, or speakers.
(ii) Types of qualifying programs.
Qualifying programs may be formal
programs, correspondence or individual
study programs, and teleconferencing:
(A) Formal programs. Formal
programs are programs that meet all of
the requirements of paragraph (f)(2)(i) of
this section and also require physical
attendance by at least three individuals
engaged in substantive pension service

VerDate Nov<24>2008

18:23 Sep 18, 2009

Jkt 217001

in addition to the instructor, discussion
leader, or speaker.
(B) Correspondence or individual
study programs (including audio and/or
video taped programs). Correspondence
or individual study programs are
programs completed on an individual
basis by the enrolled actuary. Such
programs are qualifying programs if they
meet all of the requirements of
paragraph (f)(2)(i) of this section and
also provide a means for measuring
completion by the participants (for
example, a written examination).
(C) Teleconferencing.
Teleconferencing or other
communications technologies
(including webcasting) are qualifying
programs if they meet all of the
requirements under paragraph (f)(2)(i) of
this section and either—
(1) Include a sign-on/sign-off capacity
or similar technique to verify
attendance; or
(2) Provide a means for measuring
completion by the participants (for
example, a written examination).
(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. A sole
proprietor shall not be treated as a
qualifying sponsor for purposes of this
section.
(ii) Sponsor agreements.
Organizations requesting qualifying
sponsor status shall file sponsor
agreement requests with the Executive
Director and furnish information in
support of such requests 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.
(iii) Sponsor enrollment cycle.
Qualifying sponsor agreements will
remain in effect for no more than one
sponsor enrollment cycle. The
Executive Director shall publish the
names of such sponsors on a periodic
basis.
(A) For sponsor agreements effective
on or after January 1, 2008, and before
January 1, 2012, the applicable sponsor
enrollment cycle will end December 31,
2011.
(B) For sponsor agreements effective
on or after January 1, 2012, the
applicable sponsor enrollment cycle
will be three years and will begin on
January 1 and end on December 31 at
the end of the three year period. Each
such three year period is a ‘‘sponsor

PO 00000

Frm 00026

Fmt 4702

Sfmt 4702

enrollment cycle.’’ The sponsor
enrollment cycle is not affected by when
during the enrollment cycle the sponsor
agreement became effective. For
example, for sponsor agreements
effective on or after January 1, 2012 and
before January 1, 2015, the applicable
sponsor enrollment cycle will end
December 31, 2014. The subsequent
sponsor enrollment cycle will begin
January 1, 2015, and end December 31,
2017.
(iv) Certificates of completion.
Qualifying sponsors shall furnish to
each attendee successfully completing a
program presented by such qualifying
sponsor a certificate listing the
following information:
(A) The name of the attendee.
(B) The name of the sponsoring
organization.
(C) The title, location, and speaker(s)
of each session attended.
(D) The dates of the program
completed.
(E) The total credit hours claimed and
the total core and non-core credit hours
claimed.
(v) Certificates of instruction.
Qualifying sponsors 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 sponsoring
organization.
(C) The title and location of the
program.
(D) The dates of the program.
(E) The total credit hours claimed and
the total core and non-core credit hours
claimed for the program.
(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 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 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 education
requirements of paragraph (f) of this
section.
(ii) The credit for instruction and
preparation may not exceed 50 percent
of the continuing 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 36month period will not qualify for
continuing education credit. A program

E:\FR\FM\21SEP1.SGM

21SEP1

srobinson on DSKHWCL6B1PROD with PROPOSALS

Federal Register / Vol. 74, No. 181 / Monday, September 21, 2009 / Proposed Rules
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 education credit will be
awarded for the creation of peerreviewed 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 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 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 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 education
credit may be awarded by the Joint
Board for participation in drafting
questions for use on Joint Board

VerDate Nov<24>2008

18:23 Sep 18, 2009

Jkt 217001

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
is core or non-core. No credit may be
earned for hours attributable to any
content that is neither core nor noncore.
(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 § 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
education by attending a formal
program 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)
Qualified sponsors. A qualified sponsor
must maintain records to verify
satisfaction of the requirements of this
section. Such records must be retained
for a period of six years following the
end of the sponsor enrollment cycle in
which the program is held. In the case
of programs of more than one session,
records must be maintained to verify
completion of the program and
attendance by each participant at each
session of the program. Copies of any
certificates of completion and
certificates of instruction issued to the
participants in each program must be
retained.
(2) Enrolled actuaries—(i) Qualifying
program credits as student. To receive
continuing education credit for
completion of hours of continuing
education credits under paragraph (f) of
this section, an enrolled actuary must
retain all certificates of completion
evidencing completion of such hours for

PO 00000

Frm 00027

Fmt 4702

Sfmt 4702

48039

the three-year period following the end
of the applicable enrollment cycle.
(ii) Qualifying program credits as
teacher or instructor. To receive
continuing 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
applicable enrollment cycle.
(iii) Credit for publications. To receive
continuing 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 applicable
enrollment cycle:
(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 claimed and
the total core and non-core credit hours
claimed.
(iv) Other credits. To receive
continuing 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 applicable enrollment cycle.
(k) Waivers. (1) Waiver from the
continuing 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
renewal cycle to complete such
continuing education requirements
through any one or more of the various
qualifying programs offered by one or
more of the qualified sponsors.
(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
education requirements within the
allotted time, the individual will be
placed on a roster of inactive enrolled
individuals.
(4) A request for waiver must be filed
no later than the last day of the renewal
application period. Those who are
granted waivers are required to file
timely applications for future renewal of
enrollment.

E:\FR\FM\21SEP1.SGM

21SEP1

srobinson on DSKHWCL6B1PROD with PROPOSALS

48040

Federal Register / Vol. 74, No. 181 / Monday, September 21, 2009 / Proposed Rules

(l) * * * (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) An individual
who has not filed a timely application
for renewal of enrollment, who has not
made a timely response to the notice of
failure to comply with the renewal
requirements, or who has not satisfied
the requirements of eligibility for
renewal will be placed on a roster of
inactive enrolled actuaries for a period
up to three enrollment cycles from the
date renewal would have been effective.
(ii) 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.
(iii) 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 for the
enrollment cycle and 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 and to practice before
the Internal Revenue Service effective
with the date the notice of approval is
mailed to that individual by the Joint
Board.
(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. The
name of such individual otherwise will
be removed from the inactive

VerDate Nov<24>2008

18:23 Sep 18, 2009

Jkt 217001

enrollment roster and his/her
enrollment will terminate.
(ii) For purposes of paragraph (l)(5)(i)
of this section, an individual placed in
inactive status prior to the effective date
of these regulations will be deemed to
have been placed in inactive status on
the effective date of these regulations.
(6) An individual placed 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 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
education and qualifying experience
requirements set forth in this
subsection. Continuing education credit
under this subsection 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 education
requirements for return to active
enrollment from inactive status. (i)
During the first inactive enrollment
cycle: 36 hours of the qualifying
continuing education requirement from
the prior enrollment cycle 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 education credit
from 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 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 the qualifying experience
requirements set forth in § 901.12(b)(1),
must be completed since the start of the
first inactive enrollment cycle. Any
hours of continuing education credit
from 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 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 the qualifying experience
requirements set forth in § 901.12(b)(1),
must be completed since the start of the
second inactive enrollment cycle. Any

PO 00000

Frm 00028

Fmt 4702

Sfmt 4702

hours of continuing education credit
from the second inactive enrollment
cycle may be applied in satisfying this
requirement. No hours from 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 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
education. * * *
*
*
*
*
*
(n) Verification. The Executive
Director or his/her designee may request
and review the continuing 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 qualified 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:
Example 1. (i) Individual E, who was
initially enrolled before January 1, 2008,
completes 5 hours of core continuing
education credit and 10 hours of non-core
continuing education credit between January
1, 2011, and December 31, 2013.
Accordingly, effective April 1, 2014, E is
placed on a 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) E completes 7 hours of core continuing
education credit and 14 hours of noncore
continuing education credit between January
1, 2014, and May 24, 2016. Because E has
completed 12 hours of core continuing
education and 24 hours of non-core
continuing education during the last active
enrollment period and the initial period
when on inactive status, E has satisfied the
requirements for reenrollment during the first
inactive cycle. Accordingly, E may file an
application for return to active enrollment on
May 24, 2016. If this application is approved,
E 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 E used the 21 hours of
continuing education credit earned after
January 1, 2014, for return from inactive
status, E may not apply any of these 21 hours
of core and non-core continuing education
credits towards the requirements for renewed

E:\FR\FM\21SEP1.SGM

21SEP1

srobinson on DSKHWCL6B1PROD with PROPOSALS

Federal Register / Vol. 74, No. 181 / Monday, September 21, 2009 / Proposed Rules
enrollment effective April 1, 2017.
Accordingly, E must complete an additional
36 hours of continuing education (12 core
and 24 non-core) prior to December 31, 2016,
to be eligible for renewed enrollment
effective April 1, 2017.
Example 2. (i) The facts are the same as in
Example 1 except E completes 2 hours of
core continuing education credit and 8 hours
of non-core continuing education credit
between January 1, 2014, and December 31,
2016. Thus, because E did not fulfill the
requirements for return to active status
during his first inactive cycle, E 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, E must
complete an additional 38 hours of
continuing 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 responsible
pension actuarial experience during the
period subsequent to December 31, 2013.
(iii) Note that the 5 hours of core
continuing education credit and the 10 hours
of non-core continuing education credit that
E completes between January 1, 2011, and
December 31, 2013, are not counted toward
E’s return to active status and are also not
taken into account toward the additional
hours of continuing education credit that E
must complete between January 1, 2017, and
December 31, 2019, in order to apply for
renewal of enrollment effective April 1, 2020.
Example 3. (i) The facts are the same as in
Example 1 except E completes 2 hours of
core continuing education credit and 8 hours
of non-core continuing education credit
between January 1, 2014, and December 31,
2016, and 12 hours of core continuing
education credit and 24 hours of non-core
continuing education credit between January
1, 2017, and December 31, 2019. Thus,
because E did not fulfill the requirements for
return to active status during his first or
second inactive cycles, E 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, E must
complete an additional 24 hours of
continuing 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 responsible pension actuarial
experience during the period subsequent to
December 31, 2016.
(iii) Note that the total of 15 hours of
continuing education credit that E completes
between January 1, 2011, and December 31,
2013, as well as the 10 hours of continuing
education credit between January 1, 2014,
and December 31, 2016, are not counted
toward E’s return to active status and are not
taken into account toward the additional
hours of continuing education credit that E
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 4. (i) Individual F, who was
initially enrolled July 1, 2012, completes 1

VerDate Nov<24>2008

18:23 Sep 18, 2009

Jkt 217001

hour of core continuing education credit and
2 hours of non-core continuing education
credit between January 1, 2012, and
December 31, 2013. Accordingly, effective
April 1, 2014, F is placed on a 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
education credit and 4 hours of non-core
continuing education credit between January
1, 2014, and October 6, 2014. Because F has
not completed the required 6 hours of core
and 6 hours of non-core continuing
education during F’s initial enrollment cycle,
F is not eligible to file an application for a
return to active enrollment on October 6,
2014, notwithstanding the fact that had F
completed such hours between January 1,
2012, and December 31, 2013, F would have
satisfied the requirements for renewed
enrollment effective April 1, 2014.
(iii) Accordingly, F must complete an
additional 24 hours of continuing education
(12 hours of core and 12 hours of non-core)
during his/her first inactive enrollment cycle
before applying for renewal of enrollment.
Example 5. The facts are the same as in
Example 4 except that F completes 17 hours
of core continuing education credit and 16
hours of non-core continuing education
credit between January 1, 2014, and February
12, 2015. Accordingly, because as of
February 12, 2015, F satisfied the continuing
education requirements as set forth in
paragraph (e)(2) of this section without
regard to paragraph (e)(2)(ii) thereof, F 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), this section applies
to the enrollment cycle beginning
January 1, 2008, and all subsequent
enrollment cycles.
§ 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 § 910.12 is
amended by revising the section
heading and paragraphs (a), (b), (d), and
(e).
The revisions read as follows:
§ 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

PO 00000

Frm 00029

Fmt 4702

Sfmt 4702

48041

(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 10year 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,
applicants who have successfully
completed an examination pursuant to
either paragraph (d)(1)(i) or (d)(1)(ii) of
this section prior to the effective date of
these regulations, will be deemed to
have completed 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.
*
*
*
*
*
Par. 9. Section 901.20 is amended as
follows:
A. Revising paragraphs (b), (d), (e),
and (f).
B. Redesignating paragraphs (g) and
(h) as paragraph (k) and (l), respectively,
and adding new paragraphs (g) and (h).

E:\FR\FM\21SEP1.SGM

21SEP1

48042

Federal Register / Vol. 74, No. 181 / Monday, September 21, 2009 / Proposed Rules

C. Reserving paragraph (i).
D. Adding new paragraphs (j) and (m).
The revisions and additions read as
follows:
§ 901.20 Standards of performance of
actuarial services.

srobinson on DSKHWCL6B1PROD with PROPOSALS

*

*
*
*
*
(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 standards of professional
responsibility and ethics for actuarial
practice.
(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.
(3) An enrolled actuary, upon learning
of another enrolled actuary’s material
violation of this section, shall report the
violation to the Executive Director.
*
*
*
*
*
(d) Conflicts of interest. In any
situation in which an enrolled actuary
has knowledge of an actual or potential
conflict of interest with respect to the
performance of actuarial services, he/
she shall not perform such actuarial
services unless—
(1) He/she has conducted a good faith
evaluation of the circumstances giving
rise to the conflict and reasonably
concludes that his or her ability to act
fairly is unimpaired;
(2) The representation by the enrolled
actuary is not prohibited by law; and
(3) Full disclosure of the conflict has
been made, in writing, to all present and
known prospective principals whose
interest would be affected by the
conflict, including the plan trustees, any
named fiduciary of the plan, the plan
administrator thereof and, if the plan is
subject to a collective bargaining
agreement, the collective bargaining
representative, and all such principals
have expressly agreed, in writing, to
such enrolled actuary performing the
actuarial services.
(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) The actuarial assumptions are
reasonable individually and in
combination, and the actuarial cost

VerDate Nov<24>2008

18:23 Sep 18, 2009

Jkt 217001

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

PO 00000

Frm 00030

Fmt 4702

Sfmt 4702

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
need only return those records that must
be attached to the client’s legally
required forms. 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 legal
obligations.
(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

E:\FR\FM\21SEP1.SGM

21SEP1

Federal Register / Vol. 74, No. 181 / Monday, September 21, 2009 / Proposed Rules
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 legal obligations. 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.
*
*
*
*
*
(m) The rules of this section apply to
all actuarial services and related acts
performed on or after the date these
regulations are published as final
regulations in the Federal Register.
Par. 10. Section 901.31 is amended by
revising paragraphs (a) and (c)
introductory text 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:

srobinson on DSKHWCL6B1PROD with PROPOSALS

§ 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.
Par. 12. Section 901.47 is amended by
revising the last sentence to read as
follows:
§ 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).
Par. 13. Section 901.72 is added to
read as follows:

VerDate Nov<24>2008

18:23 Sep 18, 2009

Jkt 217001

§ 901.72

Additional rules.

The Joint Board may, in notice or
other guidance of general applicability,
provide additional rules regarding the
enrollment of actuaries.
Zenaida Samaniego,
Chairman, Joint Board for the Enrollment of
Actuaries.
[FR Doc. E9–22454 Filed 9–18–09; 8:45 am]
BILLING CODE 4810–25–P

Washington, DC 20472, (202) 646–2820,
or (e-mail) [email protected].
FOR FURTHER INFORMATION CONTACT:
Kevin C. Long, Acting Chief,
Engineering Management Branch,
Mitigation Directorate, Federal
Emergency Management Agency, 500 C
Street, SW., Washington, DC 20472,
(202) 646–2820, or (e-mail)
[email protected].
The
Federal Emergency Management Agency
(FEMA) proposes to make
determinations of BFEs and modified
BFEs for each community listed below,
in accordance with section 110 of the
Flood Disaster Protection Act of 1973,
42 U.S.C. 4104, and 44 CFR 67.4(a).
These proposed BFEs and modified
BFEs, together with the floodplain
management criteria required by 44 CFR
60.3, are the minimum that are required.
They should not be construed to mean
that the community must change any
existing ordinances that are more
stringent in their floodplain
management requirements. The
community may at any time enact
stricter requirements of its own, or
pursuant to policies established by other
Federal, State, or regional entities.
These proposed elevations are used to
meet the floodplain management
requirements of the NFIP and are also
used to calculate the appropriate flood
insurance premium rates for new
buildings built after these elevations are
made final, and for the contents in these
buildings.
Comments on any aspect of the Flood
Insurance Study and FIRM, other than
the proposed BFEs, will be considered.
A letter acknowledging receipt of any
comments will not be sent.
National Environmental Policy Act.
This proposed rule is categorically
excluded from the requirements of 44
CFR part 10, Environmental
Consideration. An environmental
impact assessment has not been
prepared.
Regulatory Flexibility Act. As flood
elevation determinations are not within
the scope of the Regulatory Flexibility
Act, 5 U.S.C. 601–612, a regulatory
flexibility analysis is not required.
Executive Order 12866, Regulatory
Planning and Review. This proposed
rule is not a significant regulatory action
under the criteria of section 3(f) of
Executive Order 12866, as amended.
Executive Order 13132, Federalism.
This proposed rule involves no policies
that have federalism implications under
Executive Order 13132.
Executive Order 12988, Civil Justice
Reform. This proposed rule meets the

SUPPLEMENTARY INFORMATION:

DEPARTMENT OF HOMELAND
SECURITY
Federal Emergency Management
Agency
44 CFR Part 67
[Docket ID FEMA–2008–0020; Internal
Agency Docket No. FEMA–B–1074]

Proposed Flood Elevation
Determinations
AGENCY: Federal Emergency
Management Agency, DHS.
ACTION: Proposed rule.
SUMMARY: Comments are requested on
the proposed Base (1% annual-chance)
Flood Elevations (BFEs) and proposed
BFE modifications for the communities
listed in the table below. The purpose
of this notice is to seek general
information and comment regarding the
proposed regulatory flood elevations for
the reach described by the downstream
and upstream locations in the table
below. The BFEs and modified BFEs are
a part of the floodplain management
measures that the community is
required either to adopt or show
evidence of having in effect in order to
qualify or remain qualified for
participation in the National Flood
Insurance Program (NFIP). In addition,
these elevations, once finalized, will be
used by insurance agents, and others to
calculate appropriate flood insurance
premium rates for new buildings and
the contents in those buildings.
DATES: Comments are to be submitted
on or before December 21, 2009.
ADDRESSES: The corresponding
preliminary Flood Insurance Rate Map
(FIRM) for the proposed BFEs for each
community is available for inspection at
the community’s map repository. The
respective addresses are listed in the
table below.
You may submit comments, identified
by Docket No. FEMA–B–1074, to Kevin
C. Long, Acting Chief, Engineering
Management Branch, Mitigation
Directorate, Federal Emergency
Management Agency, 500 C Street, SW.,

PO 00000

Frm 00031

Fmt 4702

Sfmt 4702

48043

E:\FR\FM\21SEP1.SGM

21SEP1