2001 Budget Reflects Exam Structure Changes and New Initiatives

In approving the 2001 budget, the CAS Board of Directors authorized exam fee increases, funds for hiring an outside education consultant (as reported in the August issue of The Actuarial Review), and a discontinuation of the print version of the Notice of Examinations and the List of Passing Candidates.

The CAS Finance Committee faced a challenge this spring in developing the exam-related section of the 2001 budget. The number of candidates taking exams exclusively administered by the CAS is expected to drop more than 50 percent with the implementation of the new education and examination structure in Spring 2000. In the past, Society of Actuaries candidates sat for some of the CAS exams to receive SOA credits. This bolstered CAS exam finances. Now, while the first four exams are jointly administered by the two societies, neither society grants credit for the other's higher exams. Thus, the number of candidates sitting for CAS exams is reduced.

In addition, expenses for exams have risen sharply over the past few years. Until recently, not only did members of the Examination Committee annually volunteer thousands of hours to the exam process, their companies also were expected to contribute their expenses as volunteers. Many of the "rank and file" members of the committee are relatively new Fellows. Expecting employers to fund the volunteers' expenses became a problem in recruiting new members. The CAS Board recognized this inequity and in 1997 approved a policy of reimbursement for travel and hotel expenses. This policy was extended to the Syllabus Committee in 1999 and to a greater extent within the Examination Committee in 2000.

The examination consultant is a significant new expense item in the 2001 budget. The November 1999 report of the CAS Task Force on Education and Examination Process and Procedures recommended that the CAS should consider hiring a staff actuary. The Executive Council decided as a first step to hire an education consultant for specific assignments on a contract basis. Initially, the consultant will assist CAS members with constructing appropriate learning objectives and exam blueprints, training Examination Committee members to devise good "thinking" questions, and developing an objective measure of exam length and difficulty for the Examination Committee. The education consultant is scheduled to be hired by the end of 2000.

Beginning with the Spring 2001 examinations, the traditional Study Kit will be divided into two parts—"Web Notes" and "Study Kit." Material previously included in the Study Kit and copyrighted by CAS will be available free of charge in the Students' Corner of the CAS Web Site. For those without Internet access, a printed version of these "Web Notes" will be sold from the CAS Office. The Study Kit will contain material not owned by the CAS but for which the CAS has been granted permission to reprint.

When Future Fellows (formerly the Student Newsletter) was conceived in 1995, it was designed to increase communication between the CAS and candidates and to replace the Notice of Examinations by containing information on exam study materials and review seminars. In a Web-savvy era, the CAS leadership is now comfortable with eliminating the print version of the Notice and List of Passing Candidates—but keeping the electronic version posted on the CAS Web Site. This will save approximately $22,000 annually in printing and postage.

Exam fee increases were still necessary, however, to stem the red ink. The Executive Council recommended and the Board approved an increase to $400 for Spring 2000 and $450 for Fall 2000 exams Despite these increases, a net loss of $104,000 is projected at the end of fiscal year 2001 for the CAS admissions department.