Ron Gebhardtsbauer

Color portrait of Ronald Gebhardtsbauer

Instructor of Risk Management

Office Address 331 Business Building
Phone Number 814-865-4153
Email Address rug16@psu.edu

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Ron Gebhardtsbauer heads up the Actuarial Science program. Prior to joining Smeal, Ron served as: the Senior Benefits Advisor for the US Senate's Committee on Finance; the Senior Pension Fellow and Spokesperson for the actuarial profession at the American Academy of Actuaries in Washington DC (where he appeared frequently on TV, radio, newsprint; testified before Congress, and moderated the White House Conference on Social Security); and head of the Retirement Practice at the NYC office of William Mercer, Inc. His public sector experience includes Chief Actuary of the PBGC (the federal Pension Benefit Guaranty Corporation), and lead pension actuary at the Office of Personnel Management. Internationally, Ron has advised the governments of Canada, Bulgaria, Romania, Poland, Vietnam, and the United Kingdom. He was the Academy's lead delegate to the International Association of Actuaries (IAA) and was a member of the US delegation to the OECD Working Party on Private Pensions. He served on the boards of the Society of Actuaries, the Conference of Consulting Actuaries, and the Board of the United Methodist Church's pension system. He is also a member of the National Academy of Social Insurance. Among Ron's publications is the study note on PBGC issues used in the Society of Actuaries' exam syllabus. In addition, he was awarded the Kenneth Black, Jr. Award for the top paper in the Journal of Financial Service Professionals in 2002, the Fred Brand Jr. Teacher of the Year Award in 2017 from the Smeal College of Business, & the Top 40 Business Profs Award from Poets and Quants.

Expertise

Actuarial Science, Pensions, Retirement, Social Security, and related Tax issues.

Education

Fellow in the Society of Actuaries, Society of Actuaries, 1978

MS, Actuarial Science, Northeastern University, 1976

BS, Mathematics, The Pennsylvania State University, 1974

Courses Taught

RM 214 – Review Prob Theory (1.5)
This course introduces students to actuarial science topics and the actuarial profession. To become an actuary, individuals must pass a series of professional examinations that accredit them as professionals in the field. This course provides an introduction to the material on the earlier exams such as applications of probability theory to insurance, financial mathematics (compound interest and annuities), and provides instruction on spreadsheets, so that students can perform their homework using them. Topics covered include applications of the following to insurance and actuarial science: conditional probability, independence, combinatorial principles, Bayes Theorem, and random variables. Specific probability distributions used include the binomial, uniform, Poisson, geometric, negative binomial, hyper-geometric, and multinomial discrete distributions, as well as the exponential, normal, uniform, and gamma continuous distributions. Expectations, distribution parameters, means, medians, modes, variances, skewness, and moment generating functions are also covered. The more advanced topics of joint, marginal, and conditional distributions are used, along with functions and transformations of random variables. The application of probability theory to risk management is addressed. Throughout the course, sample problems will be reviewed to help prepare students for the actuarial professional exams.

RM 410 – FIN MATH FOR ACTSC (3)
Compound interest and annuity functions; life annuities; equations of value; determination of yield rates; bonds; introduction to derivatives. R M 410 Financial Mathematics for Actuaries (3) The first section of the course focuses on Interest Theory, including compound interest, annuities- certain, and life annuities; equations of value; loans and their valuation; the pricing of bonds (with and without default), determining their yields to maturity and outstanding balances; determination of yield rates, spot rates, forward rates, and At-Par rates; duration of an asset or liability, and immunization of interest rate risk. The second section introduces students to derivatives, including the description, payoffs, and profits of forwards, futures, puts, calls, and swaps, and how to use them to manage a company's or investor's financial risks. The course helps prepare actuarial students for the international actuarial exam FM (Financial Mathematics).

RM 415 – Modeling for Actsc (3)
Modeling for Actuarial Science provides detailed actuary principles dealing with models of interest rates used to price liabilities, and models of stock prices and options used to price employee options and cash balance accounts. The first section of the course focuses on discrete models, such as binomial option pricing, which can be used for pricing employee stock options. The second section covers put-call parity, the effects of style, maturity, and strike price on option prices, generalized parity, and exchange options. The third section looks at continuous models such as: 1) the Black-Scholes formula and it's applications to options on stocks, currencies, futures, and market-making, 2) Delta-Hedging and the understanding of and pricing of exotic options (Asian, Barrier, Compound, Gap, and Exchange Options), 3) understanding lognormal distributions, Monte Carlo testing, Brownian motion, Ito's Lemma, historic and implied volatility, Sharpe ratios, interest rate models, and the application of these to liabilities. The course assists in preparing students for the international actuarial exam MFE (Models in Life Contingencies).

RM 494H – Research Project (2)
Supervised honor student research projects identified on an individual or small-group basis.

RM 297 – Special Topics (2)
Prepares students for Actuarial Exam in Probability Theory and gives them an Introduction to Actuarial Science

R M 297C – Intro to Actuarial Science and Probability Theory (1)
A review of probability tools used in the assessment of risk.

R M 410 – Financial Mathematics for Actuaries (3)
Compound interest and annuity functions; life annuities; equations of value; determination of yield rates; bonds; introduction to derivatives.

R M 497C – Probability and Actuarial Science (1)
A review of probability tools used in the assessment of risk.

R M 412 – Actuarial Mathematics II (3)
Joint-life and survivor-life functions, population life tables, and multiple decrement theory, with applications to disability and retirement problems.

R M 411 – Actuarial Mathematics I (3)
A study of the mathematical theory of life contingencies; single-life functions and their applications.

R M 415 – Modeling for Actuarial Science (3)
Modeling for Actuarial Science, including models of interest rates, used to price liabilities, and models of stock prices and options used to price Employee Options and Cash Balance Accounts.

R M 494H – Honors Research Project (Variable)
Supervised honor student research projects identified on an individual or small-group basis.

INS 494H – Research Project (variable)
Supervised student activities on research projects identified on an individual or small-group basis.

INS 496 – Independent Studies (variable)
Creative Projects, including research and design, which are supervised on an individual basis and which fall outside the scope of formal courses.

INS 497B – Financial Models for Actuarial Science (3)
This course covers material in the Society of Actuaries Actuarial Models - FE exam, such as interest rate models, valuation of derivative securities, and risk management techniques, and particularly their application to insurance, pensions, and investment

INS 411 – Life Contingencies I (3)
A study of the mathematical theory of life contingencies; single-life functions and their applications.

INS 410 – Compound Interest and Annuities--Certain (3)
Compound interest and annuity functions; equations of value; determination of yield rates; construction of tables.

INS 412 – Life Contingencies II (3)
Joint-life and survivor-life functions, population life tables, and multiple decrement theory, with applications to disability and retirement problems.

Selected Publications

Gebhardtsbauer R., "Introduction to Actuarial Science." Textbook and Videos for Commonwealth Students, 2016
I wrote a Study Note on Intro to Actuarial Science for students in my RM 297 course, and created videos for the Commonwealth students..
Gebhardtsbauer R., "Models for Quantifying Risk." Textbook, 2014, Invited
I edited my Chapter on Pensions for the textbook “Models for Quantifying Risk” used by Universities and Colleges for their Life Contingencies courses..
Gebhardtsbauer R., Barbarin A. M., "Evaluating Survival of Cimex lectularius using Life Table Comparisons." Journal of Medical Entomology, 2013.

Research Impact and Media Mentions

"WJAC TV6 program on PBGC reducing Bethlehem Steel pensions", Television
"Getting the most out of your 401(k)", Marketwatch, Web
"PSU Actuarial Science alum profiled", ValuePenguin, Web
"Global Aging", Leader's Edge, Journal or Magazine
"Retiring after 65 could be the new normal", Scranton Times-Tribune, Newspaper
"Putting PBGC out of business", Institutional Investor, Web
"How Long Individuals Live After Age 65", CNNMoney, Web
"Retiring Early: Should I Tap Social Security or Savings?", CNN, Web
"The Oldest Person in the World Dies Fairly Frequently.", The Atlantic Wire, Web
"The Pension Crisis Facing Pennsylvania and Other States.", WPSU-FM, Web
"US Auto Industry Pulls Back from Pension Brink", Reuters, Web
"Welcome to the 'New Normal': Economic Problems Change Expectations, Plans and Lives", The Patriot-News, Newspaper
"Will Social Security be There for Today's Young Workers?", Reuters, Web
"Social Security Debate: Take the Quiz", CNNMoney, Web
"Raising the Retirement Age", CNNMoney, Web
"The Red-Hot Debate Over Raising the Retirement Age", CNNMoney, Web
"Fixing Social Security: The Low Hanging Fruit", CNNMoney, Web
"Flood of Retirees Nudges Social Security to the Brink", The Trumpet, Web
"Security Blanket Fraying Quickly", Chicago Tribune, Web
"Insurance Weekly News", Insurance Weekly News, Newspaper
"Helping Preserve Retirement Security in a Recession.", Senate Health, Education, Labor and Pensions Committee, Testimony on Retirement Security
"PSU professor testifies before Senate committee on pensions", U. S. Senate, Senate Committee Testimony on Pensions
"What You Need to Know About Social Security", m, Journal or Magazine
"Retired at 54, Pensionless at 74?", The New York Times, Newspaper
"How Would I Fix PPA?", Enrolled Actuaries Report, Journal or Magazine
"Social Security Math Understates Scope of Funding Problem", Investor's Business Daily, Journal or Magazine
"Sotomayor's Diabetes: 'She Overcomes It Every Day", CNN, Web
"How Some Firms Boost The Boss's Pension", The Wall Street Journal, Journal or Magazine
"Broken Nest Eggs", The Centre Daily Times, Newspaper
"John's A Political 'Survivor'", New York Post, Newspaper
"The Life Expectancy of John McCain", KNX-AM (CBS radio-Los Angeles), Radio
"One-In-Four Chance McCain May Not Survive Second Term", The Associated Press, Newspaper
"Social Security Fixes Aren't Election Fodder", The Baltimore Sun, Newspaper
"The Only Way To Fix Social Security", CNNMoney, Web
"When 401(k) Investing Goes Bad", The Wall Street Journal, Journal or Magazine