Articles - JLT congratulates the Actuarial Profession


JLT congratulates the Actuarial Profession in addressing conflicts of interest, but believes that the proposals do not go far enough

 The Actuarial Profession has just published a consultation paper on new policy proposals relating to conflicts of interest. JLT Benefit Solutions Limited (JLT) welcomes this paper and the measures detailed in the paper to address the question of conflicts of interest for actuaries. However, on the issue of actuaries advising trustees and companies on matters relating to pension schemes, JLT believes the proposals do not go far enough. In particular, JLT calls on the Actuarial Profession to ban individual actuaries advising employers on any matter relating to a pension scheme where the actuary is also the Scheme Actuary appointed to advise the trustees.

 Phil Wadsworth, Chief Actuarial Officer at JLT, explains "The management of pension schemes in the UK is beset by conflicts of interest for employers and trustees alike. With nearly all UK pension schemes facing solvency deficits affecting the security of members' benefits, there is a fundamental conflict between employers protecting shareholders' interests and trustees protecting members' interests. In such circumstances, the only sensible course of action is to separate entirely advice given to trustees from advice given to employers. It is not reasonable to expect any professional (even with the strongest of professional guidelines) to attempt to advise two parties whose interests may be so far apart. In a significant number of cases, it is not even appropriate for the same firm of actuaries to be involved in simultaneously advising the trustees and the employer connected to the same pension scheme."

 Phil Wadsworth continues "In our experience, separating actuarial advice to employers and trustees on pension schemes does not lead to any unnecessary increase in costs. But it does lead to a significant improvement in pension scheme governance and helps to protect trustees and employers alike, in the management of their own conflicts of interest."

 Phil Wadsworth concludes "There may, very rarely, be circumstances where it would be acceptable for the Scheme Actuary (who is the trustees' adviser) to give advice to the employer. But any such cases should be treated as exceptions to the rule and managed outside the normal rules, which in our view, should ban dual appointments of individual actuaries to advise both trustees and employers on a particular pension scheme."

Back to Index


Similar News to this Story

COP28 may be do or die for one point five degree aspirations
With the UN’s annual climate conference kicking off today in Dubai, Ritchie Thomson, senior responsible investment associate at Aegon Asset Management
Oblivian Coalmine on pension funds fossil fuel industry ties
This new film from Make My Money Matter, starring the Academy Award winner Olivia Colman, highlights that £88 billion of UK pension savers money is in
Hopes and fears for pensions in 2024
Aon has set out its “hopes and fears” for pensions in 2024. After a year in which UK pension schemes digested the events of 2022 and adjusted themselv

Site Search

Exact   Any  

Latest Actuarial Jobs

Actuarial Login

Email
Password
 Jobseeker    Client
Reminder Logon

APA Sponsors

Actuarial Jobs & News Feeds

Jobs RSS News RSS

WikiActuary

Be the first to contribute to our definitive actuarial reference forum. Built by actuaries for actuaries.