What would you like your data to look like?

I just listened to Sherron Watkins earlier this morning and am inspired to post my personal ethical dilemma. What would you do if you were me?

“We need to get the valuation data sent to the client by the end of next week. Put them in the format the client requested and make whatever changes it takes to match what we sent them last year.” Your direct manager instructed you to do so and you know any changes made to the data will cause the data to not be valuation data but just a forged set of data to satisfy client demand.

You are the project manager for one of the largest actuarial consulting firm. Your clients include high profile Fortune 500 companies with large pension plans. You just started working at this new firm a couple months ago and are eager to show them your knowledge and capability. The firm has very high expectation of you and assigns you to be the project manager for the largest client in the San Francisco office. In the past, it was always difficult to staff a full team to service the client due to difficulties in finding suitable hires. The client revenue accounts for 25% of the total revenue in the office. Lately, the client have had special data request and is open about a competitor’s engagement with the firm on minor asset liability management projects. The engagement contract is due for renewal by the end of this year and losing the client will a cause major embarrassment to the firm and major financial loss.

As part of a pension plan valuation process, the pension consultant needs to send the valuation data to the client for final confirmation every year. This process is required by law to ensure data that is being used for liability calculation is accurate. With the data you are currently using, the client is marginally more than 80% funded which means the client is safe from needing to do accelerated cash contribution to the pension plan. The final report is due to the government in a week and you realize there is a huge discrepancy between your valuation data and the valuation data that was sent to the client a year before. In a normal case those two data sets should be almost identical except for updated pay from the prior year.  You are running out of time because everything needs to be finalized within a week. The client is very unhappy with the delay in sending them the valuation data and you know they have been talking to another consulting firm; you do not want to lose the client. So your direct manager instructs you to manipulate the data to satisfy client demand. You know not only it is a violation of law; it also implies the liabilities reported could potentially be incorrect and the client could be less than 80% funded. If you provide the client with the manipulated data, the client will never know it is not the actual valuation data since the firm did the exact same thing in fabricating the valuation data last year and the client never figured it out. You know if you don’t provide the client with some clean data and file the report on time, you will possibly lose the client to a competitor and your position will be on the line. Also, if you rerun the valuation with the correct data, the client might end up being less than 80% funded and it will definitely cause some very unpleasant surprise especially when the client is already feeling very cash strapped.

You are stuck between a rock and a hard place. Now you ask yourself, “What should I do next?”