New Exam Passing Grade setting procedure

[silverfox]

The 60% passmark rule that was passed by the SOA Board in June 2005 has been repealed. A new passmark-setting procedure has been enacted, effective with the May 2006 exams. The CAS Board is expected to approve an identical procedure tomorrow. If all goes as planned, then the new procedure will be communicated to candidates shortly. (Please don't ask for details now; give the SOA a chance to release this information in due course, as they certainly will.)

Bruce

http://www.actuarialoutpost.com/actuarial_discussion_forum/showpost.php?p=1449983&postcount=232

Sorry for dredging up old posts, but I was wondering if I missed the new procedure or if it ended up not getting passed.

[Gandalf]

See this post (http://www.actuarialoutpost.com/actuarial_discussion_forum/showthread.php?p=1488032#post1488032) and the following ones in that thread. In post 262 Bruce confirms that the new procedure was adopted. From what has been announced, there is no set percentage (like the 60% that was never agreed to by the CAS) that will guarantee passing.

[silverfox]

I was hoping it would become a little less black box.

[bdschobel]

Yeah, you aren't alone.

Bruce

[DW Simpson]

This is reiterated on Page 10 of the CAS meeting minutes:

.pdf file: http://www.casact.org/members/BoD/030906min.pdf

[hotkarl]

Ambiguity....The devil's volleyball.

[wooHoo]

How does this apply to the EA exams?

[Maine-iac]

Not at all, I would imagine. I'm not a pension actuary, but I've always been given the impression that the Joint Board pretty much goes its own way.

When I was taking SOA exams, and the SOA offered joint credit for the EA exams, there was always a disclaimer that the pass mark set by the SOA would not necessarily equal the pass mark of the Joint Board, so it was possible to pass for SOA credit and fail for EA credit, or vice versa. (I didn't take those exams, but I never heard of it actually occurring.)

[wooHoo]

Not at all, I would imagine. I'm not a pension actuary, but I've always been given the impression that the Joint Board pretty much goes its own way.

When I was taking SOA exams, and the SOA offered joint credit for the EA exams, there was always a disclaimer that the pass mark set by the SOA would not necessarily equal the pass mark of the Joint Board, so it was possible to pass for SOA credit and fail for EA credit, or vice versa. (I didn't take those exams, but I never heard of it actually occurring.)

That's the thing. It doesn't happen. And now for the retirement track, you actually need both EA-2A and EA-2B to get your FSA.

Has the SOA actually looked at these tests or do they just administer them. Why I need to know EA2B to get my FSA confounds me. Especially after the past 2 sittings of it.

[bdschobel]

The SOA has very little influence on the EA exams, which are prepared by the Joint Board for the Enrollment of Actuaries. They also set the passmark.

Bruce

[JMO]

Not at all, I would imagine. I'm not a pension actuary, but I've always been given the impression that the Joint Board pretty much goes its own way.

When I was taking SOA exams, and the SOA offered joint credit for the EA exams, there was always a disclaimer that the pass mark set by the SOA would not necessarily equal the pass mark of the Joint Board, so it was possible to pass for SOA credit and fail for EA credit, or vice versa. (I didn't take those exams, but I never heard of it actually occurring.)

Yes, it was possible. One of the most exasperating experiences I had with the exam system was the sitting for which I passed the EA exam, but got a 5 on the separately administered SOA exam on the same material. I really felt I knew the material well enough that I should have passed both. :furious:

Anyway, when the SOA went through one of its periodic transitions, it decided not to duplicate the work of administering the EA exam, and retroactively gave me credit for passing the EA version.
:tup:
Shortly after that change of heart, I decided to go back and take the remaining SOA exams and soon got the FSA designation.

[Maine-iac]

So currently, the SOA will explicitly accept the grading of the Joint Board, and not grade those exams themselves?

[bdschobel]

Yes.

Bruce

[wooHoo]

The SOA has very little influence on the EA exams, which are prepared by the Joint Board for the Enrollment of Actuaries. They also set the passmark.

Bruce

Sorry to hijack this thread -

Bruce-

Does it concern you that for getting a SOA FSA credential in the retirement track, it is now totally dependent on passing an exam from a different organization? At least under the old system, people had the alternative of taking 8P rather than EA-2A, although I can't imagine that many people did that.

Yes, I realize that to be a pension actuary in the US, it makes sense to get an EA. However, I do not think the EA exam's fall in line with the rest of the SOA exams.

We can take this discussion offline if you want. Perhaps it is just the frustration of the EA exams talking.

[bdschobel]

Well, it's a bit of an overstatement to say that getting an FSA is "totally dependent" on passing the EA exams. Those exams are part of the process of getting an FSA in the retirement track but no more significant than other parts. And whether we like it or not, this arrangement reflects reality. It would be odd for the SOA to grant an FSA to a retirement practitioner who could not pass the EA exams. Where would that person practice, anyway? Outside the U.S?

Bruce

[qwyjiboChu]

interesting thread... has anyone suggested the Angoff scoring model to the Joint Board? From my friends' comments, I think we all did really well on the few things that showed up and have been tested before.

[Ncrug]

interesting thread... has anyone suggested the Angoff scoring model to the Joint Board? From my friends' comments, I think we all did really well on the few things that showed up and have been tested before.
They're using the modified Angoff scoring model for Exam P/1.

[Gandalf]

Well, it's a bit of an overstatement to say that getting an FSA is "totally dependent" on passing the EA exams. Those exams are part of the process of getting an FSA in the retirement track but no more significant than other parts. And whether we like it or not, this arrangement reflects reality. It would be odd for the SOA to grant an FSA to a retirement practitioner who could not pass the EA exams. Where would that person practice, anyway? Outside the U.S?

Bruce
I don't know what tracks are available, but Canadians represent a very significant part of the SOA.

[bdschobel]

That's a good point. I don't recall offhand, but I suspect that Canadians are not required to pass the EA exams. I didn't check, so I could be wrong about that.

Bruce

[Kenny]

That's a good point. I don't recall offhand, but I suspect that Canadians are not required to pass the EA exams. I didn't check, so I could be wrong about that.

Bruce
Non-US practitioners take a normal length CSP and DP. One (or both) of those exams are shortened for the EA exam requirement for US practitioners.

[wooHoo]

Non-US practitioners take a normal length CSP and DP. One (or both) of those exams are shortened for the EA exam requirement for US practitioners.

I believe that exam is Canadian specific. I may be wrong however. And yes, there are US actuaries practicing in other parts of the world.

[Kenny]

From http://www.soa.org/ccm/content/exams-education-jobs/education-redesign/transition-information-for-retirement-benefits-track-candidates/
U.S. Enrolled Actuaries (EA) Examinations
Starting in 2007, candidates who are taking the U.S. Retirement Benefits track to FSA will be required to have credit for both segments of the EA2 exam. The U.S. version of the Retirement Design and Pricing (DP-U) exam, as well as the U.S. version of the Retirement Company/Sponsor Perspective (CSP-U) exam, will not include material tested on the EA exams. Consequently, the length of the DP-U exam will be 3½ hours and the CSP-U exam will be 4½ hours. The DP and CSP exams for the other tracks will each be 6 hours.
...

In 2007, some candidates will not have credit for both segments of the Canadian Retirement Benefits Course 8. There will be a two-year window, covering the exam administrations in 2007 and 2008, in which the new Canadian Retirement Design and Pricing (DP-C) exam will be segmented to accommodate the transition for these candidates.
Interesting. It appears there is a Canadian specific Retirement track with full length, Canadian specific, CSP and DP exams; or a US specific Retirement track with reduced, US specific, CSP and DP exams, plus the EA2 exams.

I wonder what the E&E's thoughts were considering someone in WooHoo's position where they are practicing outside either of these 2 countries but are seeking an SOA designation. It seems a completely different exam for that group would be burdensome, unless they chose to keep CSP and DP split like the 2007 and 2008 offerings and make it an alternative to the EA route.

[Alto Reed on a Tenor Sax]

Ambiguity....The devil's volleyball.

RN

[Gandalf]

From http://www.soa.org/ccm/content/exams-education-jobs/education-redesign/transition-information-for-retirement-benefits-track-candidates/

Interesting. It appears there is a Canadian specific Retirement track with full length, Canadian specific, CSP and DP exams; or a US specific Retirement track with reduced, US specific, CSP and DP exams, plus the EA2 exams.

I wonder what the E&E's thoughts were considering someone in WooHoo's position where they are practicing outside either of these 2 countries but are seeking an SOA designation. It seems a completely different exam for that group would be burdensome, unless they chose to keep CSP and DP split like the 2007 and 2008 offerings and make it an alternative to the EA route.
I can understand why a track outside the US/Canada framework would be impractical: huge development resources to create additional material to make it comparable to what others have to do to achieve FSA. Woohoo would have his choice between the US and Canadian versions, wouldn't he, even if neither is a great fit?

[wooHoo]

I realize that I am the exception here. I also have full intention of finishing the EA exams.

Mostly, this is due to frustration around the EA exams.

Under the 2000 system, a person only had to 8R and 8P. 8P covered pension funding mathematics. With credit for EA-2A, which covered pension funding mathematics and much more, one could get credit for 8P.

My objection is the addition of EA-2B to the requirements (or at least the EA-2B that was recently offered). Does the SOA really think an FSA should have to pass that incarnation of the exam?

[twig93]

221 people sat for 8P the last time it was administered, whereas only 152 sat for 8RC. I can't find older stats (if someone can help me out with a link, I'd be interested to see it) but unless the differential is an anomoly, it would seem that there are probably more people taking 8P than just Canadians. So those people are now forced to do the EA exams when they otherwise would just do 8P.

It does seem that the SoA is making it harder for that cohort of people which may or may not be intentional.

[wooHoo]

Fall 04
171 8p
216 8R
134 8RC

http://examresults.soa.org/fall04/fall04_epr.html

[Kenny]

221 people sat for 8P the last time it was administered, whereas only 152 sat for 8RC. I can't find older stats (if someone can help me out with a link, I'd be interested to see it) but unless the differential is an anomoly, it would seem that there are probably more people taking 8P than just Canadians. So those people are now forced to do the EA exams when they otherwise would just do 8P.

It does seem that the SoA is making it harder for that cohort of people which may or may not be intentional.

Under the 1-8 exam system (early 2000s) people were still had to take either a US specific 8R or a Canadian specific 8R, plus 8P. Is there reason for this group to choose 8R-U over 8R-C? If not, and CSP-U, DP-U, and EA2 is a more difficult route than CSP-C and DP-C, then aren't they now being provided a reason to choose 8R-C?

An analogous situation would be if no changes were made to 1-8, except to the retirement track. The SOA decides it is no longer going to offer 8P. Instead you can take 8RC (a 6 hour exam covering whatever it used to plus pension mathematics - curerntly covered in 8P) or you can take 8RU (a 2 hours exam covering whatever is on the current 8RU and 8P bit isn't covered by EA2) plus EA2. Those that originally chose 8RU for no discernable reason might now choose 8RC bc the new US specifc track is more difficult.

[twig93]

Under the 1-8 exam system (early 2000s) people were still had to take either a US specific 8R or a Canadian specific 8R, plus 8P. Is there reason for this group to choose 8R-U over 8R-C? If not, and CSP-U, DP-U, and EA2 is a more difficult route than CSP-C and DP-C, then aren't they now being provided a reason to choose 8R-C?

An analogous situation would be if no changes were made to 1-8, except to the retirement track. The SOA decides it is no longer going to offer 8P. Instead you can take 8RC (a 6 hour exam covering whatever it used to plus pension mathematics - curerntly covered in 8P) or you can take 8RU (a 2 hours exam covering whatever is on the current 8RU and 8P bit isn't covered by EA2) plus EA2. Those that originally chose 8RU for no discernable reason might now choose 8RC bc the new US specifc track is more difficult.

I guess I'm operating under the assumption that more people would, other things equal which they no longer are, choose to learn the US material. Being a much bigger country, there's probably a greater chance that the knowledge of the US regs would at some point come in handy than the Canadian ones. Perhaps that is just my US-centric point of view, but I don't think so. We ARE a much bigger country than Canada in every measure other than land mass.

[JMO]

For working outside of the US/Canada, principles are much more important than legislative details. I could be wrong, but my suspicion is that the EA exams are even more focused on regulatory requirements than the SOA-sponsored Canadian version.

[twig93]

For working outside of the US/Canada, principles are much more important than legislative details. I could be wrong, but my suspicion is that the EA exams are even more focused on regulatory requirements than the SOA-sponsored Canadian version.

That's probably true. I guess the point I was trying to make is that if I was working outside the US/Canada in the retirement track, I would probably choose the 8P/8RU path over the Canadian path just because I would figure that the chances are higher that the US material would come in handy than the Canadian material coming in handy. Since that option is not going to be available in the future, the SoA is basically encouraging everyone in that boat to follow the Canadian path. Which doesn't necessarily seem like a good thing to me.


Semi-Related Question from someone who doesn't work in Retirement at all: wouldn't someone working inside the US strictly in Defined Contribution take the 8P/8RU path now? Isn't EA specific to pension work? Aren't we basically forcing those people to take the EA exams that they will never need/use?

Edited to correct DB/DC error

[Kenny]

I don't know much about 8RC, but from a cursory glance of the required readings, there appears to be quite a bit of overlap. Actually, the SN list is virtually identical, including information regarding FASB pronouncements, Social Security, Canadian Plan design innovations and CICA requirements. I haven't compared the actual exams but it seems they currently cover essentially the same materials, including US, Canadian and International standards.

I'll look at the actual questions later, but it just doesn't seem like switching to the Canadian specific track would affect international students much, unless the syllabi change drastically and focus more overtly on nation specific material.

[Kenny]

Semi-Related Question from someone who doesn't work in Retirement at all: wouldn't someone working inside the US strictly in Defined Benefits take the 8P/8RU path now? Isn't EA specific to pension work? Aren't we basically forcing those people to take the EA exams that they will never need/use?
Unlikely, Defined Benefits is Pension. The EA designation is required to sign any IRS/DOL related documents. Basically the required annual filings for every plan in the US. It would be more common and much more practical/useful for a US retirement practitioner to get an EA w/o an FSA vs an FSA w/o an EA.

[twig93]

Unlikely, Defined Benefits is Pension. The EA designation is required to sign any IRS/DOL related documents. Basically the required annual filings for every plan in the US. It would be more common and much more practical/useful for a US retirement practitioner to get an EA w/o an FSA vs an FSA w/o an EA.

:duh: I meant Defined Contribution.

[JMO]

:duh: I meant Defined Contribution.
What is actuarial about Defined Contribution?

[Kenny]

:duh: I meant Defined Contribution.If you working strictly on DC plans and intended to continue down that path I'm not sure why you would get an FSA designation at all. If you truly stay strictly DC, there is no need for the EA designation either. I believe yankeetripper works mostly in plan admin on both DB and DC plans and is pursuing the EA designation, but not an FSA. He mightbe able to provide more insight.

For DB practitioners, my understanding is that one of the main driving forces for individuals to obtain FSA/EA rather than EA only is company driven, not because it affords any additional knowledge or benefit (other than additional flexibility in a future job search). From an IRS/DOL standpoint, I do not believe there are any barriers to an EA only pension actuary. You have the same legal standing, can sign all the same documents, etc, unless your company places restrictions on what you can do. There have been several (heated) discussions on the benefits/necessity of the FSA designation in the pension section over the past several years.

[twig93]

Hmm, well I don't know what they do, but we have quite a few actuaries working in our DC area. I would assume they're doing actuarial work as opposed to actuaries pursuing non-actuarial roles. They keep hiring more actuaries at any rate, and the students are part of the student program, FSA is a requirement for many of the positions, etc. I think a couple of those actuaries are 8P/8RU folks. (I'm in the US.) A couple switched over from pension.

[Brutè]

I was hoping it would become a little less black box.:lol:

Well, I would rather be in then out, but the bright side of failing out of exams is that this kind of thing doesn't bother me in the slightest any more.