A little actuarial humor for you

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Ah, the life of a business/economics/financial reporter. It pretty much is all fun and games. Witness what happened when I stopped by the 60th annual conference of the CFA Institute (the trade group for financial analysts) at the Hilton just up the street this morning to catch a panel discussion on “Envisioning the Future of Retirement Plans.”

One of the speakers was D. Don Ezra, director of strategic advice for pension consulting firm Russell Investment Group, who confessed that getting up in front of an audience of 1,600 made him a little nervous. He was followed by M. Barton Waring, a retired big cheese at mega-money-manager Barclays Global Investors (official title: chief investment officer for investment policy and strategy, emeritus).

Waring was mocking the way actuaries use unrealistic discount rates (expected rates of return, essentially) to determine if pension funds have enough money in them. He brought up Ezra’s fear of crowds, and said:

Don, you’re an actuary–discount them at a higher rate. You can get them down to 400 people, easy.

Everybody laughed.