My actuarial status has changed, and it has had an emotional impact
Most people who knew me when I was much younger probably think of me as an actuary. Those who met me for the first time after I was in my 40s probably don’t, but may well be aware of my actuarial background. I mention this because my status has just changed.
I loved being an actuarial student in London, England. In those wonderful days the Commercial Union gave its students a half day off every week for each exam they signed up for. I took my exams in threes, which was unusual enough that they said they’d “only” give me two half-days off a week, three exams being too many to study for at a time. Well, no problem – I was grateful enough to take Tuesday afternoons and Thursday mornings off. (What a life, when you’re fully paid!)
The subject matter came easily to me, and I passed all my exams first time around, and there I was in 1969, at the tender age of 24, a Fellow of the Institute of Actuaries, or FIA. I knew little about life, to be honest, but a lot about the technical stuff that actuaries worked on. Essentially I characterize the technical stuff as thinking about possible future events in two dimensions. The first is to estimate the chance that the event will occur (so, the study of probability); the second is to estimate the amount needed to be set aside today to cover a payment some time in the future (so, the study of compound interest). And then apply the principles of probability and compound interest to three practical fields: insurance, pensions and investments.
Simple to describe, but not necessarily easy to do at the level demanded, given that most actuarial students need more than one attempt to pass many of the exams.
Something else that the field of study achieves is to inculcate a mindset: to use a quantitative and analytical lens through which to view many events in life. My wife Susan had actually dated two actuarial students before she met me, which enabled me to use the line: “Why do you want students, when you can have the real thing?” It didn’t influence her one bit, but fortunately she loved me and we married etc etc. Over the years she summed up her perspective as follows: “Once an actuary, always an actuary” – meaning that the quantitative and analytical mindset is permanently ingrained. (Actually it’s probably there before you qualify, and the profession is simply a natural one for such people to gravitate to.)
When I moved to Toronto I also became a Fellow of the Canadian Institute of Actuaries, and happily got involved with the Canadian profession. In addition to presenting papers at sessional meetings, I also became a member of the governing council (which was what the profession called its board of directors) of the CIA (a set of initials we were amused to share with a better-known American intelligence service) and its Vice-President for pension matters.
Just before I turned 40, along with two others I started the Canadian arm of what is now Russell Investments. I always found the assets of pension funds much more interesting than the liabilities, and making the assets my field of expertise was another happy direction that I had already been pursuing for some years before Russell. I didn’t use the initials FIA after my name, but continued to be a member of both the (English) Institute and the Canadian Institute. I also became an Associate of the (American) Society of Actuaries.
Five years later I moved to the States to Russell’s head office, and realizing that I had found my career and corporate home, I gave up my connections with the Canadian Institute and the Society. But for purely sentimental reasons I retained my FIA status. My work involved consulting to clients about investment-related and governance-related issues, lots of writing, participating in pension industry conferences, and the usual elements of a climb up the corporate ladder, becoming an executive director of the company.
Move ahead twenty-plus years. I graduated from full-time work. Yes, Life Two was good! I worked part-time in an ongoing role as a pension fund investment consultant. And I joined the investment committee (IC) of a wonderful philanthropic group. Even after I gave up my part-time consulting, I stayed in the IC, because it felt very fulfilling, allowing me to feel that I was a small part of all the worthwhile things the philanthropies were doing.
I asked the (English) Institute if I could be given retired status. No, they said, not while I still had my IC role. I asked again just ahead of my final one-day IC meeting. And they suggested that I apply again the following week, when the day would be behind me. Evidently one paid day ahead of me was enough to require me to continue to retain my full-time professional status.
I gave up my IC role because I realized that I had lost touch with the current state of investment issues. The aspects I had really contributed to the philanthropies involved governance rather than investing – organizational issues – aspects they were now well on top of. And so my ongoing value was, frankly, minimal. And I had no desire to reacquaint myself with the day-to-day investment world. So I resigned from the IC.
Finally, at that point, the Institute agreed that I qualified for retired status. What an achievement on my part! – or so I felt, since it had taken three attempts, and so had been three times as difficult as qualifying as a Fellow in the first place. This meant that I no longer had to undertake CPD (continuing professional development) – yaay! Not that any CPD had benefited me for the previous 30+ years, as there was nothing in my role that required any actuarial background. (More reflections on this in a moment.)
Would this entitle me to call myself “FIA (ret)”? You know, the way I’ve sometimes seen military people do. Not that I would use it, of course – I just thought it would clearly reflect my status. No, just plain FIA. OK, though it made no difference as I didn’t use it anyway.
Some time after that, the good folks at Morneau Shepell Asset & Risk Management (MSARM, for short) approached me. They asked me if I’d care to join their board. Well, my goodness, being asked by such an eminent (and likeable) group was flattering. But, I told them, it wouldn’t work, because I came with two insuperable stumbling blocks.
One was that I was over 70 – the sort of age at which people are more usually gently nudged off boards, rather than invited to join. To which their response was: “Well, in that case, you should join the board soon!”
The other was that I was as out-of-date as could be, being unfamiliar with current investment thinking and practices, and having no desire to reacquire that familiarity. And, to cap it all, my great professional achievement was to have been granted retired status, so that I presented myself professionally as being ignorant and irresponsible! To which they made it clear that it wasn’t professional knowledge they sought, it was my decades of experience and thought leadership they wanted, not letters after my name.
So I chatted with the leaders of the team and observed the team in action, was very favorably impressed, and joined their board.
Which brings us to the present.
Routinely verifying my retired status, the Institute asked if I was in any paid work that relies upon my actuarial training or experience “in the widest interpretation,” or on my membership of the Institute (now merged with the Scottish Faculty of Actuaries, and together known as the Institute and Faculty of Actuaries, or IFoA).
I didn’t, and still don’t, think so. Even if I had forgotten everything I ever knew to pass the exams 50 years ago, and the application of that knowledge, that would not compromise whatever value I still have by one iota. Because it’s simply my experience and thought leadership, which relate to corporate and human life rather than to actuarial matters, that create my value. But it isn’t up to me to define “the widest interpretation.” It’s up to the IFoA. And, as you can guess, they believe that I fall within “the widest interpretation.”
So I analyzed my options. (Hey, once an actuary, always an actuary, right? Plus the IFoA seemed to be insisting that I’m still a practising actuary.) So … give up my MSARM role, or stop being paid for it, or go back to CPD. No, no, no.
So, with great sadness (for I’m a sentimental sort), I offered my resignation from the IFoA, almost exactly 50 years after qualifying as a Fellow.
With great humanity, they got back to me and said they’d like to talk to me, to make sure I was aware of all the options. Gosh, I thought, I had surely analyzed them accurately, hadn’t I? (See “no, no, no” above.) But what can one lose by talking?
Nothing. In fact, one can gain something, because it turned out I was ignorant of the fact that I can continue with “affiliate” status. Yes please! (There’s that sentimentality again.) No longer an FIA (that’s OK, I don’t need that), but no CPD, and still, as an ongoing member, receiving IFoA materials. (Of which the first has been, ironically: “Do you want to help shape the future of the Actuarial profession? Join our Council.” But even though they profess to be seeking skills and experience, the small print says essentially that you have to be a Fellow or Associate for that.)
And so here I am, no longer a Fellow, but an “Affiliate” of the IFoA. That means that, in addition to receiving actuarial publications and notices of meetings, I’m recognized (in some way) by a number of other national actuarial organizations, have access to the members’ area of the website, and am eligible to take part in meetings, conferences and research activities.
A reflection on what “the widest interpretation” includes.
I feel I’ve spent the last several decades of my career as an investment practitioner. I didn’t consider that the same as practising as an actuary. There are things for which the full actuarial professional qualification is essential, for example the reports that only a qualified actuary is legally entitled to sign. That isn’t necessary in investment practice.
Yes, investments use probability and compound interest, the two essential elements in any valuation. And actually so too do most elements of corporate finance, in deciding which projects to launch or continue or wind up. And even more broadly, “in the widest interpretation” (as the IFoA say), I’d imagine the same principles are involved in all forms of budgeting – even in acting as Treasury Secretary or Chancellor of the Exchequer or Finance Minister or whatever the position is called in any given country.
It isn’t necessary to be an actuary, of course, to be a practitioner in any of these fields. Some of them have their own qualifications, others don’t. But while it isn’t necessary to be an actuary to do these things, in the IFoA’s “widest interpretation” the reverse isn’t true, and it’s evidently sufficient to do any of these things to be considered as continuing to practice as an actuary. It doesn’t matter that an actuarial qualification isn’t required in these fields.
All of which makes me wonder …
These days one can contemplate a long Life Two. And it’s surely not unusual for those with some sort of professional background to want to continue to use one’s experience in some small way for at least a few years. Wouldn’t it make sense for professions to grant retired status when the technical knowledge isn’t being used at all? It’s the lifetime corporate and human experience that’s of potential ongoing value. Wouldn’t some designation like “FIA (retired)” make it clear that the person does not claim to be practising as a professional? It says to me: “I used to be an FIA, but no longer claim to be up-to-date professionally.” Any ability to sign reports as an actuary would be removed. Indeed, that status would be lost forever, being reclaimable only by subsequently satisfying afresh all the requirements to be a practising actuary.
I know that regulatory and professional bodies need to operate under fairly rigid and bureaucratic rules. The notion that every case has to be studied individually and judgments rendered on every nuance of difference just doesn’t make sense, in practice. Fair enough. But a change in the rules, to recognize the new realities of a longer Life Two, while still protecting the profession’s reputation for competence and honesty, surely is worth considering. Indeed, given the characteristics that “FIA (retired)” could be associated with, as I’ve outlined them above, that status need not be one for the profession itself to police: it could be elected unilaterally (and irrevocably) by any FIA. I’d much rather be “FIA (retired)” than “Affiliate of the IFoA,” for which no Fellowship achievement is necessary at all. And doesn’t “FIA (retired)” describe a retired FIA’s status much more clearly than the current “FIA” alone, which makes no distinction between those who claim to be currently professionally qualified and those who don’t?
I know former colleagues, from my insurance days, as well as others in the investment and consulting fields, who are all living Life Two and feel much as I do on this subject. In the old days, when these rules were drawn up, retirement didn’t last nearly as long as it does today: it didn’t feel like a second life. Today it does. And for those of us who continue to have active minds and use them, it’s our life experience rather than our long-ago professional backgrounds that give us a sense of worth.
Some friends suggest that part of the problem may be money. Professional dues are dramatically smaller for members with less than full status. If there are large numbers of actuaries who would be willing to forsake full status and abandon CPD without forfeiting their hard-earned actuarial credential, and they then pay those dramatically reduced annual dues, this may significantly affect the profession’s finances. Perhaps a sort of half-way house for fees may be the solution, for those who elect retired status while continuing to work but not work as actuaries. Or set some low earned income limit to qualify for low or half-way house fees. I’m guessing (with no evidence whatsoever) that many would love to retain something more than just affiliate status with the profession that once defined us.
And I’m certain that people of this sort would enhance any profession’s reputation and credibility. Indeed I’m reminded of the motto adopted by the Journal of the Institute of Actuaries, in the form of a quote from Sir Francis Bacon: “I hold every man a debtor to his profession, from the which as men of course do seek to receive countenance and profit, so ought they of duty to endeavour themselves by way of amends to be a help and ornament thereunto.” Many of us would love “to be a help and ornament thereunto,” even in retirement.
I have no idea how to take this notion further, other than sending it to the Institute.
Just in case you were wondering … there’s progress on preparing the book Life Two for publication. But the process isn’t complete yet.
I wonder if it’s possible for a professional to elect to be formally classified as having retired.
I have written about retirement planning before and some of that material also relates to topics or issues that are being discussed here. Where relevant I draw on material from three sources: The Retirement Plan Solution (co-authored with Bob Collie and Matt Smith, published by John Wiley & Sons, Inc., 2009), my foreword to Someday Rich (by Timothy Noonan and Matt Smith, also published by Wiley, 2012), and my occasional column The Art of Investment in the FT Money supplement of The Financial Times, published in the UK. I am grateful to the other authors and to The Financial Times for permission to use the material here.