Tuesday, July 6, 2010

Peeking into the profession

SOA blog has an entry with the results of their Retirement 20/20 initiative, which was basically a call for actuaries to submit papers proposing new retirement designs. I just finished reading the winning paper. It proposed a plan to replace current "tier II" plans (401K or similar voluntary saving plans) with a mandatory participation plan using smarter investment strategies, requiring annuity payout, and incentives to maximize amount of investment. Or I guess it doesn't totally replace tier II plans, it just fills the same role they do and would likely, for all practical purposes, result in replacing them for the majority of workers. Current retirement savings would still exist and could be used. In fact, the proposed plan would still use current providers, but with some different standards, higher degree of worker particiapation and more strict federal oversight.

Personally, I liked it. I think it is smart that the plan didn't try to replace Social Security, but provided a model which once proven could be expanded to phase out Social Security to some degree. Possibly. I like that the author recognized that while his plan might be controversial with individuals who would prefer to manage their own risk, he wasn't proposing a savings or investment plan (which is what those individuals are actually looking for), he was proposing a national retirement plan and considering the interest of that much larger pool.

It was well written and for the most part intellectually accessible. I have to admit, though, there were some technicalities of the plan that I only vaguely grasped. I mean, as someone just getting into the actuarial field. I don't yet have experience working in it, am currently reviewing the math for the first actuarial exam and my only exposure to the financial aspect of the field (outside, you know, personal experience with my own 401K), is from taking a single accounting course a few years ago.

Mostly what I read it for was to see some hot topics in the profession. I wanted to see some examples of what actuaries do, what they write. The blog, like most, has a comments section and the blogger, Andy Peterson, invites commentary on the papers. I was hoping to see some discussion by other actuaries. After all, Andy mentioned that in the panel where the papers were presented there was considerable discussion inspired by some healthy disagreement on some aspects of the plans. I figured, the blogosphere being what it is, there was sure to be some comments! But there's nothing.

I guess there's all sorts of reasons there may be no comments. Maybe no one reads the blog. Though I guess I do, huh? And one is significantly greater than zero, isn't it? Maybe actuaries just aren't the type to comment. Insert stereotypes about timid math geeks . . . or more likely, if my experience with actuaries is any indication, they're just smart enough to not troll their own professional boards. Maybe the blog's readers tend to be newbies like me who feel underqualified to comment meaningfully.

Whatever the reason, while I enjoyed what I read, I would have liked to see what interaction goes on in the professional community.

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