RET Module 1

RET Module 1 – Actuarial work and retirement benefits applications is one of the two modules of the retirement benefits track of the Canadian Institute of Actuaries' Fellowship (FCIA) pathway.

About the module

The primary audience for the FCIA modules is individuals who desire to be admitted as Fellows of the CIA.

Individuals seeking continuing professional development credit can also register for the FCIA modules.

Each FCIA candidate through Pathways 1 and 2 is required to complete both FCIA modules, while Pathway 3 candidates will have to complete the second module. It is anticipated that FCIA module candidates will have six months from the date of module purchase to complete each FCIA module. As a general guideline, candidates should allocate approximately 100 hours to complete all activities included in a module.

Learning Objectives

Introduction to risk and insurance

1. Describe risk including insurable risk.
2. Provide examples of types of insurable risks and classes of life insurance that respond to insurable risk.
3. Describe and provide examples of perils and hazards.
4. Explain the conflicts that can arise in the objectives of risk management.
5. Identify and describe the five steps of the risk management process:
   • a. Step 1 – Identifying and analyzing exposures.
   • b. Step 2 – Formulating options.
   • c. Step 3 – Selecting the best technique.
   • d. Step 4 – Implementing the risk management plan.
   • e. Step 5 – Monitoring results and modifying the plan.

Insurance categories and functions

1. Describe the basic insurance relationship of pooling funds to pay losses.
2. Explain the major functions of insurance:
   • a. Spread of risk.
   • b. Aid to security.
   • c. Aid to credit.
   • d. Loss prevention.
   • e. Source of capital.
   • f. Source of employment.
3. Identify and describe categories of insurance.
4. Identify and describe categories of retirement schemes.
5. Describe the different forms of insurance companies (e.g., stock companies, mutuals, government insurers, captive insurance companies).
6. Explain financial stability and returns for insurers, including the differences for stock companies and mutuals.

Insurance company operations

1. Describe the major functions of an insurance company, including:
   • a. Finance, accounting, and investment.
   • b. Actuarial.
   • c. Marketing, agency, or production.
   • d. Underwriting.
   • e. Claims.
   • f. Reinsurance.
   • g. Risk management.
2. Describe basic insurance administration and how actuaries are involved.
3. Describe underwriting regimes, applications for insurance, preferred criteria, and screening tests, and how they relate to selection of risk.
4. For reinsurance:
   • a. Explain the purpose of reinsurance.
   • b. Describe the primary methods and types of reinsurance.
   • c. Describe the main reinsurance contract provisions.
5. Describe the roles and responsibilities of actuaries in insurance companies.

Consulting firm operations

1. Describe the traditional functions of a consulting firm:
   • a. Administration and consulting of pension plans.
   • b. Filing requirements.
   • c. Actuarial valuation and financial reporting requirements.
   • d. Benefit plan design and amendments.
   • e. Audit and peer review.
   • f. Appointed Actuary tasks and responsibilities.
   • g. Product design and pricing.
   • h. Negotiation of premium rates.
   • i. Sales and distribution of insurance.
   • j. Third-party administration.
   • k. Risk management.
2. Describe the roles and responsibilities of actuaries in consulting firms.

The insurance marketplace

1. Describe basic insurance products:
   • a. Life insurance and annuities.
   • b. Property and casualty (P&C).
   • c. Health and group insurance.
   • d. Government-sponsored and public plans:
     • i. Employment Insurance.
     • ii. Workers’ compensation.
     • iii. Health care.
     • iv. Pension plans.
2. Describe key issues related to customers of insurance products.

Actuaries in corporations

1. Describe the traditional functions of an actuary operating in corporations, including role and responsibilities within these functions:
   • a. Retirement benefits.
   • b. Compensation.
   • c. Health and benefits.
2. Understand the importance of global compensation for a corporation, including its impact on hiring, retention, attrition, succession planning, etc.
3. Understand the different departments within a company that interact with global compensation actuaries, such as:
   • a. Finance.
   • b. Accounting.
   • c. Legal.
   • d. Human resources (HR), including labor relations (LR).
4. Outline the roles and responsibilities of actuaries in company departments identified in 3. within the global compensation strategy, such as:
   • a. Actuarial valuations for accounting purposes.
   • b. Financial forecasting and reporting.
   • c. HR and LR strategies.
   • d. Plan text drafting and amendments.
   • e. Proxy circulars.
   • f. Participation in committees.

The Canadian retirement environment and professionalism

1. Describe and understand the three pillars of the Canadian retirement system and their utilization to optimize personal wealth and retirement income.
   • a. Public plans such as the Canada Pension Plan and Québec Pension Plan.
   • b. Employer-sponsored plans.
   • c. Personal savings.
     • i. Registered vehicles such as RRSP and TFSA.
     • ii. Non-registered savings.
2. Explain how employer-provided plans coordinate with public plans in Canada.
3. Analyze the challenges facing public plans in Canada.
   • a. Evaluate alternative proposals for facing those challenges.
4. Determine the aggregate benefit to the employee from an employer-provided and public plan.
5. Describe how public retirement benefits, personal savings, and employer pension plans can be used to maximize benefits and manage longevity risks.
6. Understand the Canadian retirement legislative framework.
7. Understand the role and responsibilities of the actuary in the Canadian retirement system.
8. Describe and explain how guarantee funds such as Assuris and Ontario’s Pensions Benefits Guarantee Fund (PBGF) operate.
9. Understand the application of the CIA Standards of Practice and Rules of Professional Conduct.

The U.S. retirement environment and professionalism

1. Understand the retirement system in the United States.
2. Understand the U.S. retirement legislative framework.
3. Explain how employer-provided plans coordinate with social insurance plans in the United States.
4. Determine the aggregate benefit to the employee from an employer-provided and social insurance plan.
5. Explain and apply guidelines to Professional Conduct.
6. Explain and apply relevant qualifications standards.
7. Explain and apply the applicable standards of practice related to valuing retirement obligations.
8. Compare the Canadian and U.S. retirement systems.

Principles of actuarial evidence

1. Describe the role of actuaries in family law, including the valuation of pension plan benefits in marriage (relationship) breakdown.
2. Describe the role of actuaries in civil litigation, including damages in personal injuries, fatalities, wrongful termination, insurance and reinsurance disputes, pension disputes, and other litigation.
3. Describe the role conferred to actuaries by the Criminal Code of Canada in calculating the criminal rate of interest.
4. Describe and distinguish the roles and responsibilities of a fact witness, an expert witness, and a provider of litigation advice.
5. Describe the context provided by the common law, legislation, and the rules of civil procedure on actuarial evidence practice.
6. Describe the role of CIA Rules of Professional Conduct and Standards of Practice (Part 1000, general, and Part 4000, actuarial evidence) in guiding the professionalism of actuarial evidence practice. Show awareness of the importance of professionalism for actuaries whose actuarial evidence practice is incidental to full-time practice in another actuarial practice area, such as insurance or pensions.
7. Describe the functions fulfilled by other professionals in the litigation area, such as life-care planners, vocational experts, accountants, economists, engineers, personal financial planners, business valuators, appraisers, and structured settlement brokers, and how these professionals complement and compete with the function of actuaries in actuarial evidence.

Source Material

Source Material

• FCIA Syllabus – Retirement benefits track (CIA - 2024)
  • RET Module 1 (pp. 16–19)