Pensions: research working parties

Introduction and objectives

This working party follows on from a recommendation made in the report of the target end states for defined benefit pension schemes working party (1.15 MB PDF). See paragraph 1.13.

The concept of a dynamic discount rate is covered briefly in the above paper (see paragraphs 4.78 to 4.87) but, in essence, it’s an approach whereby the discount rate used for funding purposes moves in sympathy with the low-risk asset portfolio that is backing the liabilities. It works well in cases where the asset portfolio consists of investments with a high degree of contractual cash flows that are similar in nature and profile to the expected benefit outgo. There are, of course, other factors to consider when setting the discount rate such as risks not covered by the cashflows but the above concept is still a useful starting point.

About

Chair: Gareth Connolly
Established: 2021

Pensions – The Future of Pensions Dashboards: An Actuarial Perspective is focussed on the pensions dashboard and member communications.

Key objectives

What can actuaries contribute to the challenge of providing a pensions dashboard to members, and enabling them to understand the risks and opportunities their current saving affords them?

Terms of reference (37 KB Word doc)

About

Chair: Andrew Lowe
Established: 2024

Collective defined contribution (CDC) schemes are a new kind of pension scheme for the UK, featuring fixed contributions, investing collectively, and paying variable income for life.

CDC schemes bring advantages for workers and employers over other pension designs and also bring new challenges for pension design and management. Actuaries have a large part to play in this work.

CDC schemes were first enabled in the UK by the Pension Schemes Act 2021, with further variations due to be enabled in future. The UK’s first CDC scheme was approved by the regulator in 2023.

The IFoA aims to aid the development of UK CDC pensions in the public interest.

The working party works to support this aim, including by:

• developing thinking in CDC and other collective risk sharing schemes
• engaging with external stakeholders such as DWP and the regulator
• commenting externally on CDC

About

Chair: Simon Eagle
Established: 2018

Terms of reference (PDF, 170 KB)

The Personal Financial Planning Working Party looks at how actuaries’ skills can be used to improve personal financial planning among individuals.

Key objectives

Our key objectives include:

• Considering how actuaries can acquire the necessary skills to work directly with individuals;
• Reviewing how actuarial skills can be used to support the delivery of financial advice; and
• Drawing on our experience of working with pension scheme trustees and sponsoring employers to contribute to public policy discussions related to personal financial planning.

Planned outputs

• Respond to FCA consultation GC20/1 by 4 September 2020
• Provide recommendations to the education committee on adding material relevant to advising individuals on personal financial planning in the syllabus for actuarial exams – end of 2020
• Develop a policy statement on how we think actuaries can help individuals with personal financial planning – end of 2020.

About

Chair: Andrew Kemp
Established: 2020