Page 1 of 1 SOA BOARD OF DIRECTORS October 16-17, 2010 Business Report FROM: Finance Committee DISCUSSION Mark Freedman, Secretary/Treasurer LEADER(S): Stacy Lin, Deputy Executive Director/CFO TAB #: B6 SUBJECT: Draft Budget 2011 MOTION: The Board of Directors approves the 2011 budget The 2011 budget reflects an expansion of services to our non-U.S. members. We will provide three seminars and six webcasts in Mandarin for our Chinese members, and two seminars and four webcasts on Canadian-specific topics for our Canadian members. The budget also includes a significant investment in research activities on current actuarial issues. Additional operational commitments and strategic initiatives included in the 2011 budget are highlighted below. The operational commitments include: • Transition of exam MFE to computer-based testing in 2011 • Continue to offer two fellowship exams per year • Continue to support and update the Learning Management System (LMS) and e-Learning platform • Market research; i.e., FSA exam candidate survey, actuarial salary survey, bi-annual member and candidate survey, employer attitudes and awareness study, and focus groups • Research initiatives related to retirement and healthcare • Investment in a content management system to structure content and provide better search results • Continue to support the PD Committee and the competency framework with new PD-related modules and a new learning management system • Membership database improvements visible to the members The 8 strategic initiatives reviewed by the IAC include: • Intellectual Capital Framework - Research • International Membership Strategy • Opportunities for Actuaries in Business Analytics • Reputational Risk (Phase 1 – Public Pension Plans) • Canadian Member Engagement • Branding Enhancement • Membership & Candidate Engagement • Interorganizational Synergy The strategic initiatives will be discussed during the Board meeting under item DISC4. The Finance Committee serves as a Board of Directors oversight group for the financial affairs of the organization under the direction of the Secretary/Treasurer. The Finance Committee reviews the monthly financial statements and other financial information at each Finance Committee meeting. The most recent financial information and dashboard analysis is included in the consent agenda at each Board meeting. If issues arise, programs are modified to protect reserves while providing member services and furthering the mission.
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Page 1 of 1
SOA BOARD OF DIRECTORS October 16-17, 2010
Business Report
FROM: Finance Committee DISCUSSION Mark Freedman, Secretary/Treasurer LEADER(S): Stacy Lin, Deputy Executive Director/CFO TAB #: B6 SUBJECT: Draft Budget 2011 MOTION: The Board of Directors approves the 2011 budget The 2011 budget reflects an expansion of services to our non-U.S. members. We will provide three seminars and six webcasts in Mandarin for our Chinese members, and two seminars and four webcasts on Canadian-specific topics for our Canadian members. The budget also includes a significant investment in research activities on current actuarial issues. Additional operational commitments and strategic initiatives included in the 2011 budget are highlighted below. The operational commitments include: • Transition of exam MFE to computer-based testing in 2011 • Continue to offer two fellowship exams per year • Continue to support and update the Learning Management System (LMS) and e-Learning platform • Market research; i.e., FSA exam candidate survey, actuarial salary survey, bi-annual member and
candidate survey, employer attitudes and awareness study, and focus groups • Research initiatives related to retirement and healthcare • Investment in a content management system to structure content and provide better search results • Continue to support the PD Committee and the competency framework with new PD-related
modules and a new learning management system • Membership database improvements visible to the members The 8 strategic initiatives reviewed by the IAC include: • Intellectual Capital Framework - Research • International Membership Strategy • Opportunities for Actuaries in Business Analytics • Reputational Risk (Phase 1 – Public Pension Plans) • Canadian Member Engagement • Branding Enhancement • Membership & Candidate Engagement • Interorganizational Synergy
The strategic initiatives will be discussed during the Board meeting under item DISC4. The Finance Committee serves as a Board of Directors oversight group for the financial affairs of the organization under the direction of the Secretary/Treasurer. The Finance Committee reviews the monthly financial statements and other financial information at each Finance Committee meeting. The most recent financial information and dashboard analysis is included in the consent agenda at each Board meeting. If issues arise, programs are modified to protect reserves while providing member services and furthering the mission.
Society of Actuaries 2011 Draft Budget-Management Basis
Submitted by: Mark FreedmanVice-President Secretary/Treasurer
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Page 1
Overview of the 2011 Draft Budget September 15, 2010
Summary Revenues for 2011 are budgeted to be $40,342,160 and expenses are budgeted at $40,148,780 with a change in net assets before investments of $193,380. The budgeted membership equity percentage at year-end 2011 is 67%. The table below shows the comparison from projection 2010 to budget 2011:
Projection 2010
Budget 2011
Revenues $37,860,500 $40,342,160Expenses $34,882,340 $40,148,780Change in Net Assets before Investment Income $2,978,160 $193,380Membership Equity – End of Year 66% 67%
Given this strong financial position, very few fee or registration fee increases have been proposed for the 2011 budget. We’ve also been able to provide significant funding for strategic and operational initiatives.
This summary is intended to give members of the Board a good sense of what the budget proposal intends to accomplish. Additional details are provided by departments beginning on page 7, following the summary.
The Budget Process Each year, budget proposals are created by individual department managers and discussed with the Executive Team. Subsequent discussions resolve open items, coordinate resources and finalize the draft budget. Once complete, the draft budget is reviewed by the Secretary/Treasurer and Finance Committee. The first draft of the 2011 budget was presented to the Board at the June meeting for input and comments. The second (and final) draft of the budget is presented to the Board for approval at the October meeting.
Dues and Fees
• Member Dues: The 2011 member dues rates are held at the 2010 level of $575 for FSAs and career ASAs, and $290 for ASAs. This will be the fifth year the SOA has not increased its member dues.
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Page 2 • Basic Education: We are continuing to align exam fees with the changing format and frequency of exams — a process begun last year.
- The draft budget proposes a $50 per exam increase (from $975 to $1,025) for FSA exams. This increase is intended to offset expenses related to the SOA’s decision to offer all Fellowship exams twice annually. The anticipated increased expenses, budgeted at $500,000, include longer question writing and exam grading sessions (and, thus, more expensive) for volunteers at Central Review and Grading, and more volunteers. Details on activities needed for the FSA 2X project were provided to the Board last October. The increased fee does not cover all expenses, but is expected to generate about $177,000.
- The budget proposes a $75 increase (from $200 to $275) for the MFE exam and is intended to address the added cost of moving this exam from pencil/paper to computer-based testing and the added length of the exam. The per-candidate cost is $64 for US, $106 for Europe, and $117 for Asia. The $75 increase is a blending of the per candidate cost. The fee increase aligns the cost of this exam with MLC and C, which are similar in length and content. The impact is $520,000 in additional revenue versus an estimated cost of $675,000 ($115,000 for set-up and development fees, and $555,000 budgeted for the per-candidate fees).
• Professional Development –There are no proposed fee increases for PD in the 2011 budget. The 2011 budget for all PD events reflects an anticipated
increase in the number of attendees over 2009 actual attendance, consistent with our 2010 year-to-date results.1
Expenses of Interest In addition to ongoing program funding, the draft 2011 budget funds a number of important new and continuing initiatives. Several major planned initiative expenditures are highlighted below to give members of the Board a good idea of what the budget seeks to accomplish.
• Research – We are continuing to add resources to our research activities, in line with our research mission. This budget includes the Board’s approved funding of $430,000 for the Rapid Retirement Research pilot project. We have hired a new research actuary for this initiative (with an employment end date set for the conclusion of the pilot) and IT-related expenses. There is several additional research projects proposed for 2011, as the SOA has been increasing its focus on research, and if the initiatives below are approved by the Board, will continue to do so.
- Reputational Risk (Phase 1 – Public Pension Plans) – To address issues that present significant reputational risk to the actuarial profession. In light of the current public issues surrounding public pensions the SOA is looking to provide analysis of public pension data. This research will inform the Board of the issues and provide options for response. The amount included in the budget is $100,000 for a research project.
1 Virtual sessions - We are planning a total of 17 virtual sessions offered at the Annual Meeting, Spring Meetings, and Valuation Actuary Symposium. The pricing structure planned is the same as 2010 for virtual sessions; $139 for 1-2 people, $299 for 3-6 people and $539 for 7 or more. Webcasts - The budget reflects 60 planned webcasts for 2011, including 10 devoted to our China region members and to Canadian-specific issues. The total of 60 webcasts represents an expected increase over 2010 by 10 webcasts. The draft budget continues the 2010 tiered pricing structure as follows; $99 for 1 person; $175 for two people at one site; 250 for 3-5 people; $375 for 6-8 people; $500 for over 9 people. Staff will be prepared to address questions about this structure, including pricing used by other actuarial organizations.
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Page 3
- Health Actuarial Research Post-Reform Opportunities – With the passage of the Patient Protection and Affordable Care Act, now is the time to research actuarial opportunities beyond their traditional scope and audience. This research will supplement our existing research capabilities to involve a quicker process and wider scope for health actuaries. The budget includes $300,000 for a research project.
- Opportunities for Actuaries in Business Analytics - This initiative is intended to determine whether significant new opportunities exist for actuaries in the field of business analytics and, if so, what initiatives the SOA should undertake to exploit and develop these opportunities. A market research study will be conducted for $200,000.
- CAE Research grants – Two grants were awarded in 2010 and will be supported through 2013 with two new grants being awarded annually. The budget includes $490,000 in 2011 for four research/educational grants.
- Intellectual Capital Framework - Research – This would be phase III of the Intellectual Capital Framework initiative, with a focus on the SOA’s research strategy. The focus would set priorities for research with regards to target audiences, type of research produced, oversight structure and source and allocation of resources. The budget includes $30,000 for travel related expenses for the Develop Knowledge Team (DKT).
• Professional Development Redesign – We’re continuing work on the PD Redesign through the creation of additional PD modules centered on the
competency framework. Anticipated expenses for these new modules are approximately $175,000. The modules are a capital expenditure and will be depreciated over two years. Another major capital expense associated with the PD Redesign is the identification and purchase of a new learning management system (LMS) — the system that will hold PD e-learning content. The capital expense for this system is anticipated to be approximately $100,000, capitalized over five years. The total cost (including capital expenditures) for this initiative is budgeted at $336,250, which also includes consulting services and travel related costs for the committee.
• Knowledge Blueprint – As a result of ongoing work by the DKT, we anticipate an important project to better analyze and structure the SOA’s “intellectual capital” or “content”, making it much easier to find and access. Expected activities include developing a content taxonomy, tagging content, looking at all the research activities of the SOA, and selecting a Content Management System (CMS) to support the large library of information. The CMS will integrate with the SOA’s membership system (Personify), and the LMS for education, and the LMS professional development. The amount included in the budget is $447,500, of which $220,000 will be capitalized over five years.
• Brand Enhancement and Member and Candidate Engagement – The Issues Advisory Council developed a recommendation for the Board that work under the Marketing and Market Development Plan (MMDP) be split into two separate initiatives. Brand Enhancement would focus on the actuarial brand, primarily by raising visibility of actuaries through the media, with $700,000 allocated in the budget for this initiative. Member and Candidate Engagement would broaden the SOA’s channels for engaging members and candidates. Examples include broader acceptance of social media, ongoing member communications and increasing focus on engagement at local venues due to increasing financial, geographic and time constraints. Our student outreach activities would also be included in the initiative scope of work. The amount included in the budget is $400,000 primarily for outside consulting services.
• CERA marketing efforts will continue to be designed around a dual supply and demand approach. We will target employers and recruiters on the demand side and current actuaries, candidates and students on the supply side. We have budgeted $919,000 for marketing the CERA.
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Page 4 • International Membership Strategy – in order to provide greater service to our international members and provide programs that will help our members
fulfill their CPD requirements, we have added three seminars and six webcasts (Mandarin language) in the China region. We have added funding for support staff, focused on the China region, to assist with the creation and support of the seminars and webcasts specific to the China region. Also, included is international travel to allow for a Presidential officer to accept invitations to speak in the China region. Total funding for these efforts is budgeted at approximately $180,250. This is exclusive of ongoing commitments to the International Actuarial Association for membership dues and delegate travel.
• Canadian Member Engagement– Approximately 18% of our membership resides in Canada. This initiative intends to increase engagement with and services to Canadian members with the objective of increasing the SOA’s value to those members and their satisfaction with the SOA. We are planning for two seminars and four webcasts dedicated to Canada-specific topics. A staff actuary would be employed to establish a partnership with the CIA and provide a local presence as a representative to Canadian members. The budget is approximately $311,650, which includes travel expense in addition to salary and benefits.
• Personify II – The SOA has completed a major upgrade of its membership database in 2010, to Personify. Personify II will take advantage of new system functionality such as enhancements to the Online Directory, providing better e-commerce options to members, supporting downloadable online publication purchases, member publication customization options, and other member services. The amount included in the budget for this effort is $170,000, capitalized over five years.
• Staff Positions - Four new staff positions are included in the draft budget to support various initiatives, while three positions were eliminated (one HR, one professional development and one administration). The new positions include:
- Research analyst (market research) to assist with current and emerging research needs including actuarial salary survey, member and candidate survey analysis and cohort study.
- Business Analyst to assist with fluctuation and business process analysis for exam and professional development, benchmarking with other organizations, margins, and financial projections for new member services.
- Retirement Actuary for the “Rapid Retirement Research” initiative
- A staff actuary to coordinate and assist with activities in direct support of our Canadian members.
The following three pages are the numeric summary of the 2011 draft budget. Following the summary level information is the department level assumptions and budget detail that support this summary.
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Draft 9/28/2010
Page 5
Actual Actual Budget Projection Budget Forecast Forecast Forecast2008 2009 2010 2010 2011 2012 2013 2014
Society of Actuaries 2011 Draft Budget-Management Basis
Statement of Expenses by Account Type (continued)
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Tom Bakos
Highlight
Draft 9/28/2010 Page 8
The following is a summary of significant assumptions for each area of the SOA 2011 budget.Basic Education (page 15)
Actual Actual Budget Projected Budget2008 2009 2010 2010 2011
Number of Exam Registrations* 54,201 58,747 67,176 64,267 66,474*It is difficult to compare the number of candidates administered over the years reflected above due to variations in the number of exam sittings.
Preliminary Education (PE)
Society of Actuaries
Budget Assumptions & Information by Department 2011 Draft Budget-Management Basis
For the second year a staff actuary has extensively reviewed the budgeted exam candidates. A robust model was created that considered probabilities of a candidate progressing through the exam system. Trending analysis was used from 2006 - mid 2010. Three different approaches were reviewed; pessimistic, realistic, and optimistic. The budget reflects the pessimistic approach; which assumes a 1% decrease from 2010 budget's pessimistic approach. This year the budget includes $50 increase for the FSA exam fees due to offering the FSA exams twice per year. The increased revenue of $177,000, will help cover the costs for longer question and grading sessions as noted below. MFE is increased by $75, resulting in additional revenue of $520,000, due to the additional per candidate cost for computer based testing (CBT). In addition to the per candidate cost, the development costs relating to the development of a bank of exam questions is high for the first few years. The fee increase aligns the cost of this exam with MLC and C, which are similar in length and content.
The fixed cost for computer based testing for exam P, FM, C, and MFE is $114,000, $250,000, $83,000, and $115,000 respectively. In addition, the SOA pays FAP consists of eight web-based education modules and two assessments. The fellowship level modules (FSA) consist of multiple modules with exercises. Modifications and enhancements such as audio casts and excel capabilities continue to improve the candidate experience. These modifications and enhancemento the modules are budgeted at $320,000, which will be capitalized and depreciated over three years.
At the October 2009 Board meeting, $500,000 was approved to host FSA exams twice per year. The costs are primarily for travel, hotel and staff support for a part-time staff member to attend committee meetings, longer question writing and exam grading sessions, and a longer overall format. The budget includes an expenditure of $20,000 for a consultant to provide a comprehensive case study and e-learning design that will follow the exam material for the AFE and FETE course. This will be a pilot program and if successful similar courseware will be developed for the other FSA exams. Additional travel expense of $16,000 was budgeted for restructuring of the retirement exams.
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Society of Actuaries
Budget Assumptions & Information by Department 2011 Draft Budget-Management Basis
Registration fees remain at the same level as 2010. Revenue includes $28,300 from the sponsorship program. Revenue from virtual attendees is budgeted at $60,000 with $29,500 in expense for the live audio visual feed at the meeting. The 2011 annual meeting is held in Chicago which reduces the need for staff travel expense. Food and beverage costs were reviewed closely and reduced.
New York
Budget 2010 Budget 2011Chicago
Actual 2009Toronto (3 days)Quebec (2 days +1 CIA/CAS)LA (3 days)
Actual 2009
Denver (2 days)
Additional items include: $45,000 for a one day meeting in Chicago for each CAE school to share best practices, discuss potential joint activities and brainstorm ways to connect to the profession; and $36,000 for a reception for the Hickman Scholars, to be held in conjunction with the annual meeting.
Actual 2008
2011 stipends - 5 new stipends
The budget provides for the continuation of PhD/Fellow stipends and CAE grants from previous years along with new Ph/D/Fellow stipends and CAE grants for 2011. Each Ph/D/Fellow stipend is an annual commitment for five years. CAE grants may be supported up to four years. The chart below outlines the award payments for 2011.
2010 grants - year 22011 - 2 new grants
CAE Grants2009 stipends - year 32010 stipends - year 2
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Society of Actuaries
Budget Assumptions & Information by Department 2011 Draft Budget-Management Basis
III. PD Seminars (page 19)1.5 days Valuation Invest. Sym. ReFocus Living to Equity
Seminars 1 day & 2 days Actuary 1.5 days Symposium 100 Based# of Sessions - US 14 6 1 1 1 1 2# of Sessions - Canada 0 2 0 0 0 0 0# of Sessions - China 0 3 0 0 0 0 0Budgeted Attendance 50 20 759 173 263 214 100Early Bird Fee $800 $850 $875 $1,275 $895 $995 $0Total Net Revenues* $303,200 $178,000 $572,256 $212,400 $423,400 $223,500 $298,200*includes sponsorship revenue and less payouts to sections or partners
Webcasts Virtual e-CoursesArchived Webcasts
Archived Virtual
Sessions# of Sessions - US 50 17 18 300 100# of Sessions - Canada 4 0 0 0 0# of Sessions - China 6 0 0 0 0Total # of Sessions 60 17 18 300 100Total Net Revenues $540,600 $107,620 $67,500 $29,700 $13,900
Orlando (3 days)
Actual 2010
Tampa (2 days + PD Symposium) Boston (3 days)
Budget 2011New Orleans (Life & Annuity
Symposium)
Existing sponsorship agreements continue to support Val Act, Investment Symposium, ReFocus, Living to 100, Equity Based Insurance and webcasts.
Externally-sponsored events include the Equity Based Insurance, the Life Insurance Conference, Reserve Week, Critical Illness Insurance Conference, Disability Income/Long Term Care Insurers' Forum and the Retirement Industry Conference. The 2011 budget reflects a net payment from Limra/Loma rather than registration fees and full expenses for the Life Insurance Conference and Critical Illness Insurance Conference, because the SOA is not hosting the seminars. ReFocus is being hosted by the SOA for 2011 and net profits will be shared with ALCI. The ERM conference for 2011 and 2012 will be handled by CAS. A lump sum payment is budgeted at $50,000 for 2011.
With the success of the 2010 Life and Annuity Symposium the 2011 budget continues with the combined format (Life and Product Symposium) to be most cost effective. Revenue includes $28,300 for the sponsorship program. Revenue from virtual attendees is budgeted at $35,860, with $23,000 in expense for the live feed at the meeting. Food and beverage costs are high due to the Boston location.
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Society of Actuaries
Budget Assumptions & Information by Department 2011 Draft Budget-Management Basis
Page 11
Actuarial Research (page 20)
DuesActual Actual Actual Budget Projection Budget Forecast Forecast Forecast
2007 2008 2009 2010 2010 2011 2012 2013 2014
FSAs & ASAs > 5 years 575$ 575$ 575$ 575$ 575$ 575$ 592$ 610$ 628$ ASAs < 5 years 290$ 290$ 290$ 290$ 290$ 290$ 299$ 308$ 317$ Net Number ofMembers Billed 18,639 19,214 19,735 20,500 21,600 22,200 22,866 23,552 24,259
Membership Services: this includes the sub departments of Communications, Publications, Actuarial Marketing Solutions (staff actuaries), Strategic Management and Web support (page 21)
The budget includes $161,250 for the "Professional Development Redesign" strategic initiative. The purpose of the initiative is to maintain the value of the credential through leading-edge and relevant post credential educational programs. A full array of professional development programs will be developed around the competency framework which will be assessable to all members. The budget provides for travel, marketing and promotional campaigns, hosting, consultants and depreciation for the learning management system (LMS) for the professional development modules.
Experience studies billings are based on vendor costs of $1,050,000 for the regular assessment. The 2011 salaries built into the experience studies are $540,000.
The research projects include $560,000 that is managed by research committees. This includes $70,000 for pension, health, life, finance, CKER, enterprise risk management research, $50,000 for aging issues research and $90,000 for a special research project. The initiative "Intellectual Capital Research Framework" includes $30,000 for travel related expenses to provide a strategic look at all of the research activities of the SOA. This review will provide the basis for additional research.
The 2011 dues rates are the same as the lasts four years. In the forecasted years 2012-2014 the dues level is increased to reflect a cost of living increase.
As a result of our international membership strategy, we are expanding our international offerings with five new seminars and ten new webcasts for our international members; three seminars and six webcasts in China and two seminars and four webcasts in Canada. The China webcasts will be translated and broadcasted in Mandarin.
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Society of Actuaries
Budget Assumptions & Information by Department 2011 Draft Budget-Management Basis
Page 12
Research projects for 2011 include: $55,000 for the continuation of Retirement 20/20 and Untapped Opportunities for Health. $4,000 in travel expense is included to evaluate the role of the SOA relative to the actuarial clubs. This would include up to four trips to actuarial clubs for potential presentations or supporting sections that are trying to get connected to clubs. Professional fees includes $78,000 for a Staff Fellow - Life to assist the AMS department and $14,000 for speakers at the Council of Section Chair and Leadership meetings. Travel for the Strategic Management System includes three IAC face to face meetings, and one meeting for each Strategic Team. A staff actuary is budgeted to coordinate professional development activities in Canada.
At the direction of the Issues Advisory Council, the Marketing and Market Development Plan (MMDP) has been separated into two initiatives, one focused on members and candidates and another focused on branding (budgeted under marketing). "Member and Candidate Engagement" will focus on engaging SOA's members and candidates through social media, ongoing member communications and increasing focus on engagement at local venues due to increasing financial, geographic and time constraints. The student outreach and candidate communication activities would also be included in the scope of this initiative. The budget includes $400,000 mainly for consultants and travel related expenses. The budget provides $49,000 for travel and support for the Employers Council meetings. Additional SOA communication opportunities have been identified that will require staff and committee members to travel to sponsored events for education, visibility and on-going promotion of the SOA in the amount of $17,500. Marketing for the Beanactuary.org website has been included in the amount of $30,000, which would include funding for a new video and advertising/marketing buys.
Communications/Publications
Actuarial Marketing Solutions (AMS)
There are three additional strategic initiatives identified, "Reputational Risk - Public Pension Issues", "Health Actuarial Research Initiative", and "Opportunities for Actuaries in Business Analytics" for a total of $615,000 mainly for research projects. "Reputational Risk - Public Pension Issues" will begin with a background paper that will inform the Board of issues and options for response ($100,000). "Health Actuarial Research Initiative" will look at a new approach to quickly respond to the evolving needs in the health care area. The SOA will work with other organizations to expand our health research footprint ($300,000). "Opportunities for Actuaries in Business Analytics" will research new opportunities for actuaries in the field of business analytics and work to develop how the SOA can support these opportunities ($215,000).
The budget for "Knowledge Blueprint" includes $220,000 for content management software (CMS), taxonomy consultant, meeting and travel related expenses. The content management software will be depreciated over five years. The CMS will help structure and analyze the SOA's intellectual capital, which will make finding content easier and more accessible.
The "Rapid Retirement Research" initiative consists of a pilot program that will seek to strengthen the SOA's ability to provide timely, focused and relevant research to the public. The budget includes $400,000, which was approved at the February 2010 Board meeting, for hiring a staff actuary, travel, research projects, computer expense and an outside consultant to support this initiative.
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Society of Actuaries
Budget Assumptions & Information by Department 2011 Draft Budget-Management Basis
Page 13
Marketing Department (page 22)
Administrative Expenses; this includes the sub departments of Executive, Governance, Human Resources and Finance (page 23)
International (page 24)
Foundation (page 25)
Investment IncomeInvestment income for 2011 is budgeted at 3.0% for equities and .50% for money market accounts. The market impact on investment values is uncertain, therefore a conservative estimate is included.
General Assumptions:
The Foundation budget reflects the SOA's portion of the US actuarial organizations support for The Actuarial Foundation. The SOA Board approved continuing support to the Foundation through 2011. The 2011 budget includes a net contribution of $305,000 for the Foundation, a placeholder is included in forecasted years 2012-2014. The Foundation reimburses SOA for the staff time spent on Foundation programs relating to their mission and philanthropic efforts. Support to the Canadian Actuarial Foundation in the amount of $20,000 is included in the budget.
Also included is funding for market research; $120,000 for an Employer Attitudes & Awareness Study; $85,000 for a comprehensive Salary Survey of members to understand current employment roles and related salaries; $60,000 to conduct focus groups on the Perceptions of the SOA Education Process to be held in four markets; $5,000 for the Member & Candidate survey; and $5,000 for the FSA Exam Candidate survey.
International travel is budgeted at $250,000 in 2011 for travel to Sydney and Zagreb for the IAA meetings. The IAA dues have continued to increase from $15.00 to $15.50 per FSA, ASA and CERA members for a total of $333,250. $39,250 is included for the strategic initiative, "International - Membership Strategy" for translation of professional development materials and travel related expenses. Assistance with the seminars and webcasts scheduled in the China region is budgeted at $55,000, which could include and event management firm or staff support. Additional travel is budgeted at $76,000 to allow for a presidential officer to accept invitations to speak in Japan, Korea, and other regions in China.
Budgeted professional fees for legal services are lower due to the addition of a General Counsel. The staff training budget includes $108,310 for general staff continuing education. The 2010 budget includes $35,000 for recruiting fees.
As noted under Communications/Publications, "Brand Enhancement" is an initiative that was previously part of MMDP. The focus of this initiative is on the enhancement of the actuarial brand, primarily by raising visibility of actuaries through the media. The amount budgeted for this initiative is $700,000. The budget also includes $1,000,000 for marketing of the CERA credential. There is $919,250 budgeted under special supplies and services for advertising in CFO, Best Review, HER, Risk Management and other business publications. Additional expenses include: staff travel to promote the credential, exhibitor fees, printing, postage and public relations. A refresh of the SOA booth is budgeted at $25,000 under special supplies and services.
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Society of Actuaries
Budget Assumptions & Information by Department 2011 Draft Budget-Management Basis
Page 14Salaries/FTE's
Rent and Utilities
Allocated Departments
Depreciation
Strategic Pool
General cost of living increase 2.0% (source - CPI Bureau of Labor)Payroll inflation 3.1% (source - SHRM, World at Work 2010-2011 Salary Survey, Towers Watson Salary Survey)
The 2011 budget includes eight strategic initiatives: intellectual capital framework - research; international membership strategy; reputation risk - public pension issues; brand enhancement; member and candidate engagement; interorgazational synergies; Canadian member engagement; and opportunities for actuaries in business analytics. The costs of the above initiatives are budgeted in the respective department.
Strategic Initiatives
The “strategic pool” budget line was established to provide the SOA with financial resources to assess and plan for additional programs and initiatives that emerge from the strategic management system subsequent to the budgeting process. Any additional programs or initiatives will be approved by the Board of Directors for the purpose of advancing the SOA strategic plan. The pool is budgeted at $350,000.
The total FTE's for 2011 net increased by one. A Research Analyst under market research was added to assist with current and emerging research needs including membership salary survey, and member and candidate survey analysis. A business analyst was added to assist with fluctuation analysis for exam candidates and professional development attendees, as well as, margins and financial variances. Two staff actuaries were added, one for the Rapid Retirement Research initiative and to coordinate and assist with international activities in Canada. Three positions were eliminated, one in HR, one in Professional Development, and one in Administration. Total FTE's excluding the Foundation staff is 111. A salary utilization is included at 96% to compensate for open positions throughout the year.
The depreciation expense increases from 2008 through 2014 due to the e-learning modules and the membership database (Personify). The 2011 capital budget includes member facing enhancements to the membership database, new content management system (CMS), new learning management system (LMS) for professional development and cyclical rotation of computer equipment.
Under GAAP accounting rules we are required to impute rent expense over the term of the lease, expiring May 31, 2018. Therefore, the rent expense reflected the income statement is higher than the rent that will actually be paid.
Expenses related to IT and Customer Service are allocated out to all supporting departments.
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Draft 9/28/2010
Page 15
Actual Actual Budget Budget Forecast Forecast Forecast2008 2009 2010 2011 2012 2013 2014