4 Communications and Disclosures

4.1 Audience

In reporting the results of the actuarys work, the actuary should consider the background of the likely audience and should explain technical terms and concepts so that they can be understood by the likely audience. For example, a report made to an attorney experienced in the measurement, allocation, and division of retirement plan benefits in domestic relations actions might presuppose more actuarial knowledge than a report that is to be made part of the court record.

4.2 Conflict of Interest

The actuary should make full disclosure of any actual or potential conflict of interest to all known direct users. Such disclosure should generally occur before the actuary accepts the engagement or as soon as practicable after the date the actuary learns of the actual or potential conflict of interest, if later.

4.3 General Disclosures

Any communication of actuarial findings, conclusions, or recommendations concerning retirement plan benefits in domestic relations actions should include at least the following:

1. the name of the actuary responsible for the communication;
2. the identity of the client who has retained the actuary to provide services in connection with the domestic relations action and the identities of the parties to the domestic relations action;
3. a description of the actuarys role and the nature and scope of the actuarys engagement, including the scope of any statement of actuarial opinion;
4. the name of the retirement plan, description of the retirement plans circumstances, and a summary of key provisions or other relevant plan information affecting the measurement, allocation, or division of the retirement plan benefit;
5. covered party and spouse information that the actuary used when performing the services;
6. the source of any information supplied by others and the extent of the actuarys reliance on that information;
7. data deficiencies that might materially affect the results, opinion, or advice being communicated;
8. a statement of the findings, conclusions, or recommendations necessary to satisfy the purpose of the communication and a summary of the actuarial determinations upon which these are based; and
9. any facts that, if not disclosed, might reasonably be expected to lead to a materially incomplete understanding of the communication.

4.4 Actuarial Valuation Results

The actuarys communication of the results of an actuarial valuation of retirement plan benefits, as described in section 3.3, should include sufficient detail to allow another actuary to make an objective appraisal of the reasonableness and validity of the actuarial valuation. In addition to the items described in section 4.3, the actuarys communication of actuarial valuation results should include at least the following information:

1. the identity of the legal jurisdiction assumed to govern the domestic relations action, if applicable;
2. the measurement date;
3. a description of the allocation method, including the allocation date and allocation period; a description of the benefit being allocated (for example, the vested accrued benefit, the accrued benefit, the employer-provided benefit, or projected retirement plan benefits); a description of the allocation procedure and the unit of measure (for example, fractional rule, based on years of employment); a description of the allocation of age- or service dependent benefits; and a description of any adjustments made to reflect limits on benefit accruals or varying benefit accrual rates under the benefit formula;
4. a description of the benefits being valued (including applicable ancillary benefits) and any significant benefits of which the actuary has knowledge that are not included in the actuarial valuation;
5. a description of each actuarial assumption; and
6. the source of any prescribed measurement date, allocation date, allocation method, actuarial assumption, selection process, or other prescribed item that has a material effect upon the actuarial valuation results.

If the actuary has used a prescribed measurement date, allocation date, allocation method, actuarial assumption, selection process, or other prescribed item, the communication should so disclose. The actuary may also choose to disclose results that represent the actuarys own opinion as to the value of the retirement plan benefits.

4.5 Prescribed Statement of Actuarial Opinion

Any communication of the type described in section 4.4 of this ASOP shall be deemed to be a prescribed statement of actuarial opinion (PSAO) as described in the Qualification Standards for Prescribed Statements of Actuarial Opinion of the American Academy of Actuaries.

4.6 Deviation from Standard

An actuary must be prepared to justify the use of any procedures that depart materially from those set forth in this standard and must include, in any actuarial communication disclosing the results of the procedures, an appropriate statement with respect to the nature, rationale, and effect of such departures.