Does this bother you?

[Buru Buru]

Originally Posted by aces219

And the data...not so clean. It's kinda scary when we know more about the plan and about the participants than the client does (due to acquisitions and so forth).

That's definitely true a lot of the time, but this is actually one of the things that I truly hate about being a pension actuary. Often you spend so much more time tweaking the data than actually doing the valuation.

What bothers me more than someone pulling a number out of nowhere, is that with one small mistake by an inexperienced or careless person, the data could be completely screwed up thereby making the results completely wrong.

[aces219]

Originally Posted by Buru Buru

That's definitely true a lot of the time, but this is actually one of the things that I truly hate about being a pension actuary. Often you spend so much more time tweaking the data than actually doing the valuation.

What bothers me more than someone pulling a number out of nowhere, is that with one small mistake by an inexperienced or careless person, the data could be completely screwed up thereby making the results completely wrong.

I hear you about the data work. It's so hard to check too. It drives so much of the gain/loss...that's one thing I like about doing data though. Since I understand the client's data quite well, I can add a lot to the analysis. I think everyone trivializes data a lot and passes it off to junior people, but you're absolutely correct that it affects everything.

" And the data...not so clean. "

Certainly true, we also spent most of our time cleaning the data. I didn't find cleaning data to be very interesting or satisfying, unfortunately. I suppose recommending plan designs might have been more satisfying, but I mostly did valuations of existing plans.

"What about exams? Do they help?"

Yes, on the "leveraging" side, but not so much on the "developing a sense of what's reasonable" side. I think you need both exam stuff and experience. I've seen lots of cases of a student who's just read a new paper suggesting the new method to his boss, who ran with it.

Originally Posted by Lucy

I think you need both exam stuff and experience.

And a good mentor that asks and answers questions.

Originally Posted by Sammie

And a good mentor that asks and answers questions.

Definitely! This is especially important if you're just starting out. I was fortunate enough to work for a man who knew "everything" and who was very supportive of my professional development. It made all the difference in the world.

[Unpredictable]

Originally Posted by urysohn

The feelings don't go away.

I feel sorry for you.

[Avi]

Talk about necrodredging a thread.

[asdfasdf]

I personally doubt our assumptions have gotten much better in the last 8 years.

[apparition]

Goto this link and read the article on page 25.

It talks about heuristic vs scientific decision making. You are welcome.

[Durai]

There is clearly such a thing as good actuarial judgment and no question it is very important in the real world where actual data can be thin.

That said, I do share some of the feelings of the OP. I've definitely seen "judgment" used to justify an agressive projection or a lack of solid analysis. I can only speak with my experience in P&C but just as an example is it well known we have fairly consistent industry-wide adverse development in reserves. Some lines of business year after year run very hot with combined ratios well above 110% (even in low interest rate environments). The blow-ups in pensions seems to be similar.

One could easily argue that actuaries are not the ones to be held accountable. This is true to some extent since there's a diffusion of responsibility. Management / shareholder pressures, assumptions provided by underwritering or finance, all can play a role. JMO but at the end of the day, some actuary decided to put his / her stamp of approval on something they probably shouldn't have in a perfect world or without "judgment".