ABSTRACT
Actuaries are professional advisers who are members of either the Faculty of Actuaries in London or Edinburgh. We shall now be considering their role in connection with occupational pension schemes. An actuary has a number of responsibilities and duties in respect of occupational pensions. He evaluates the assets and pension liabilities of the scheme so as to assess its solvency and its actuarial health for various scheme and statutory purposes. It is a statutory requirement that actuarial advice be obtained and a valuation and report be prepared by an actuary. Section 47 of the Pensions Act 1995 deals with the appointment, role, and tasks of professional advisers, eg auditors, actuaries, fund managers and legal advisers in relation to occupational pension schemes. Section 47(1)(b) requires that trustees and managers of every occupational pension scheme must appoint an individual as actuary, and, in addition, the regulations make provisions as to the manner in which professional advisers may be appointed and the terms on which they may be appointed, and their duties. The likely areas in which the actuary may be called to advise include: (1) Valuation of funding of a pension scheme. (2) Advice as to the degree of insurance desirable for the scheme, eg relative
to death-in-service benefits or the purchase of annuities on retirement. (3) As regards treatment of the costs borne by the employer in funding a
pension scheme in the accounts prepared for the company. (4) Advice to members, employers and trustees on individual transfer
values. (5) Advice to employers and trustees as to the acquisition and disposal of the
companies and businesses. (6) General investment advice as to asset allocation and asset liability
modelling.
