Public Plans, Beware What Your Actuary Can and Cannot Do

Thick laws create strange results. Consider for example the relatively new final SEC rule on registration of municipal advisers. As well as I can tell, the intent of this provision (Section 975) of the Dodd-Frank law was to ensure that those who are advising municipalities on things like bond offerings and investments. It never looked to me that actuaries were the target.

I don't know how it looked to the SEC. What I do know is that the final rule specifically exempted "retirement board" members from SEC registration. What I also know is that it did not exempt actuaries.

Why do I care and why might you care? It looks as if there are two situations where actuaries will be subject to registration as municipal advisers and if they are, they will be subject to all the attendant SEC rules:

• If your actuary performs an actuarial study in which the actuary sets any of the investment return assumptions or
• Makes any recommendation about how the governmental entity might address an unfunded liability including advice about the issuance of a municipal financial (debt) product,

 the actuary must register with the SEC.

It seems strange to me that municipal officials serving on retirement boards would be exempted, but actuaries may not be.

I guess it's not the first time that a government agency has confused me.