That’s one of the key findings in the thematic review on corporate pensions, published by the Institute and Faculty of Actuaries (IFoA).
While the wide range of actuarial work reviewed was of good quality, the report also found that actuaries do not always fully explain the risks and uncertainties involved in advice provided on funding. Laying this out becomes especially important when that advice recommends a less prudent funding approach than the scheme actuary’s advice to the trustees.
In addition, the thematic review pointed to an issue around responsibility. In a quarter of submissions reviewed, the actuary preparing the advice was not specifically named. Follow-up discussions found that in these cases where the actuary’s name was not stated, they took responsibility for their work in other ways. However, the requirement in the Actuaries’ Code stating that members show clearly that they ‘take responsibility for their work when communicating with users’ suggests simply naming the advisor would be a clear approach.
David Gordon, Senior Review Actuary, IFoA, said: “This has been a complex review across a wide range of advice both in terms of subject matter and style and we found actuaries followed the principles of actuarial standards in their work. This report allows us to support IFoA members by identifying specific areas where improved processes could be considered and point to examples of best practice to help inform their work. I would like to thank those actuaries from 15 organisations who agreed to take part in this review.”
Neil Buckley, Lay Chair, IFoA Regulatory Board, said: “We are pleased this review has shown that the work and advice scrutinised was, in general, of good quality. Our monitoring scheme is designed to provide useful insight into the work of members and to promote high quality actuarial work in the public interest. We will review the report’s conclusions and consider whether to make any changes to IFoA standards and guidance. We will also discuss the report with fellow regulators and other stakeholders as to whether any action outside the IFoA’s remit is warranted.”
This latest report is part of the IFoA’s Actuarial Monitoring Scheme which independently reviews key areas of work in which actuaries have significant involvement and influence.
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