Proposed Bylaws Changes - Frequently Asked Questions
Why is the SOA making these changes to its legal structure?
The new not-for-profit corporation exempt under 501(c)(6) will continue to pursue the same mission as the current SOA 501(c)(3). The 501(c)(6) exemption status more closely aligns with how the SOA operates today and is commonly used by professional membership associations. The SOA will maintain its current management and staff.
The purpose of a 501(c)(6) as an association of persons with common professional interests better aligns with the SOA’s mission to advance actuaries as leaders in measuring and managing risk. The types of organizations relying on 501(c)(3) tax exemption include educational, scientific and research organizations, and the SOA will keep an affiliated entity with this particular exempt status for its research activities.
Do these changes to the legal structure impact my membership?
No. The legal structure change has no impact on membership services nor governance. SOA members will keep their membership status under the new 501(c)(6) entity. There will be no changes to the SOA’s operations. We will continue to provide the same service and support to our members and candidates.
Are these two new entities operating separately?
We will continue to operate as one organization and will maintain our mission to advance the actuarial profession. The 501(c)(3) will be a controlled affiliate of the 501(c)(6). We will maintain separate books and records reflecting the activities conducted by each entity. The two entities will be governed by a common Board of Directors (Board); the mission and strategic direction of both entities will be aligned. The Board of the 501(c)(6) entity will be elected by the members, as before, and the Board of the controlled 501(c)(3) entity will automatically mirror the Board of the 501(c)(6).
Is the SOA planning to be involved with public policy?
There will be no change in the SOA’s activities in regard to public policy. The SOA is not now and will not become an advocacy-focused organization. Public policy advocacy on behalf of the profession is ably handled in the U.S. by the American Academy of Actuaries (and in other countries by other nationally-based actuarial organizations). Nothing in this proposed change is intended to or will change that structure. The SOA has for many years developed and published objective research on important societal issues, some of which is of interest to policymakers, and will continue to do so, but that is no change in what we are doing today.
Will the SOA’s role in advocacy change? If so, will it overlap with the American Academy of Actuaries?
No. As noted above, nothing in this change is intended to or will affect the way public policy advocacy on behalf of the profession is handled today. The SOA is not now and will not become an advocacy-focused organization. The SOA has for many years developed and published objective research on important societal issues, some of which is of interest to policymakers, and will continue to do so, but that is no change in what we are doing today. We will continue to seek mutually beneficial opportunities to collaborate with other organizations and groups, including actuarial organizations such as the Academy, to support their work and their mission.
How will these changes affect how the SOA works with other actuarial organizations?
The legal structure change has no impact on our operations nor our relationships, memberships and agreements with other organizations. We will continue to seek opportunities to collaborate with other actuarial organizations and other groups to advance the actuarial profession.
How does this new legal structure benefit the SOA?
Adding the 501(c)(6) entity to our legal structure recognizes that a key – and growing – part of the SOA’s mission is to promote the profession. It is an increasing part of our mission to ensure the public understands the value of actuaries. The IRS regards these activities as most appropriate for a 501(c)(6) entity. This is a better and modernized alignment of our structure to support our mission and vision.
Why would the SOA form a hybrid 501(c)(3) and 501(c)(6) organization? Wouldn’t it be better to have a 501(c)(6) for all the SOA’s activities?
First, we have always been – aligned with our tax-exempt status as a 501(c)(3), and it is appropriate to continue conducting those aspects of our mission in a 501(c)(3) entity. Second, and more pragmatically, IRS regulations do not allow us to transfer the assets we have accumulated in the 501(c)(3) entity into a new 501(c)(6) entity. The SOA’s reserves and other financial assets must remain within the 501(c)(3).
How, if at all, will the 501(c)(3) organization's bylaws differ from the bylaws of the current organization and the proposed 501(c)(6) organization?
The 501(c)(6) entity will become the new SOA. It will be the membership body that awards the ASA and FSA designations and to which all current and future members will belong. Therefore, it will adopt and operate under the existing bylaws, so nothing will change for members in terms of member rights and privileges, member obligations, and organizational governance.
The bylaws of the 501(c)(3) entity will be changed to reflect its status as a “controlled affiliate” of the 501(c)(6). It will no longer be a membership organization in its own right. Its bylaws will not contain provisions relating to membership categories, admissions, discipline, elections, etc. Rather, the 501(c)(3) bylaws will simply specify that its Board and officers will be the same persons who hold the same positions with the 501(c)(6).
What can the SOA do as a 501(c)(6) entity that it cannot currently do?
The SOA Board – and our members – want us to place increased emphasis on promoting the value of actuaries and the value of SOA credentials. For example, we want to raise the profile of actuaries and to promote actuaries for senior and non-traditional roles. We want to promote the SOA’s credentials and to promote the capabilities of actuaries in predictive analytics. These are activities that are aligned with the mission of a 501(c)(6) entity, so the new structure would represent a better and more appropriate alignment of mission and structure.
Is there a cost associated with creating this new legal structure?
The costs are nominal fees for filing paperwork with the State of Illinois, where the SOA is incorporated, and with the IRS. Since there are no changes in volunteer and staff structure, the only operational costs are related to staff work in creating new financial accounts for the 501(c)(6) entity.
How will the two entities be named?
The change will create one new 501(c)(6) that will adopt the Society of Actuaries name. The existing SOA 501(c)(3) will be renamed the Society of Actuaries Research Institute. The entities will operate as one organization.
Why is “Education” not included in the proposed name for the 501(c)(3) organization?
The SOA provides research and education, including exams and professional development, in supporting the advancement of the actuarial profession. Pre-qualification education and professional development will remain essential elements of the SOA’s mission and will be conducted under the 501(c)(6) entity. Actuarial research will be the principal activity that remains aligned with the 501(c)(3) entity.
Why is a vote of the Fellows needed? Can Associates vote?
The SOA Bylaws require a vote of the Fellows (FSAs) to approve the amendments necessary to adjust the current 501(c)(3) entity in conjunction with the simultaneous creation of the new 501(c)(6) entity. Associates may become eligible to vote in SOA Board elections, but they do not vote on amendments to the Bylaws.
What vote is required to approve the changes?
The SOA Bylaws require approval of by a two-thirds majority of voting Fellows, or by at least 10% of Fellows, whichever is greater.
Will this new structure impact my voting rights in the future?
There will be no changes to the SOA’s governance. The SOA and our Board will continue the current governance model, which includes annual elections.
Are any dues increases anticipated with this change?
There will be no dues increases as a result of the legal structure changes. The SOA Board will continue to conduct its annual review and decision about member dues.
How do these changes to the entities impact volunteer committees?
There will be no impact to the membership nor governance from the legal structure changes. The purpose of a 501(c)(6) as an association of persons with common professional interests better aligns with the SOA’s mission to advance actuaries as leaders in measuring and managing risk. We will continue to support and encourage volunteering with us on our programs, including on research, education and professional interest sections.
Will professional fees for SOA members remain tax deductible?
There will be no change in the deductibility of member dues payments as a result of this structure change. To the extent the member dues payments were deductible as a business expense, those deductions are not dependent on the 501(c)(3) or 501(c)(6) tax-exempt status of the membership body.
How can I get more information or ask questions about these changes?
The SOA will provide updates on an ongoing basis, and we will host webcasts for members to discuss members’ questions. We will also post the webcast recordings for you to access afterwards. Visit the bylaws changes page for more details on the webcasts. Send your questions and comments to firstname.lastname@example.org.