Enrolled actuaries under ERISA are held to a set of performance standards in 20 C.F.R. 901.20. A federal district court has now ruled that these standards do not create a private right of action under ERISA against an actuary who is alleged to have violated the standards.
In Forgione v. Gaglio, No. 13 Civ. 9061(KPF) (S.D.N.Y. Feb. 13, 2015), the plaintiffs sought to hold an actuary liable for his participation in a tax shelter scheme using life insurance policies to fund a defined benefit plan. One of the causes of action alleged a violation of the Standards of Performance for Enrolled Actuaries contained in 20 C.F.R. § 901.20. Although neither party had raised the issue, the court on its own found that no such cause of action exists:
[T]he proper (and perhaps only) way to pursue a violation of what Plaintiffs refer to as the Code of Conduct for Actuaries is by filing an administrative complaint with the Joint Board for the Enrollment of Actuaries, an administrative body established by 29 U.S.C.§ 1241.
The lack of a federal private cause of action under ERISA for violation of these standards does not mean they are irrelevant to negligence claims against actuaries. Presumably a plaintiff could bring a state law claim for actuarial malpractice and allege that 20 C.F.R. § 901.20 provides part of the standard of care for the actuarial profession.
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