Would an actuary tell a lie? Or a fib? Or make a 'misrepresentation'?  This article says 'yes' — at least to the fib level — and reveals a very tricky bit of number crunching that actuaries use to make themselves look smart. 

Here's the problem.

Some (but not all) consulting actuaries will use the “Survivorship Bias in Investment Performance Surveys” in order to convince the Trustees of a superannuation fund that their existing investment manager is underperforming, and they should switch investment managers.

This apparent intellectual skill of the consulting actuarial firm then allows them to show the trustees that they, the actuaries, are very smart.

 These tables show the problem in action. 

The only investment performance table you will ever see published is the second one.

While these are hypothetical numbers, they prove a very important point!

Because published investment surveys only include “surviving” funds in their averages, their averages ARE NOT REAL. They are FALSE!

Hence the average fund will ALWAYS UNDER PERFORM THE NUMBERS IN THE SURVEYS.

This apparent intellectual skill of the consulting actuarial firm then allows them to suggest that they should take over your consulting actuarial needs.

Easy as selling the Brooklyn Bridge. What a racket!