The chairman of the National Association of Pension Funds (NAPF), Robin Ellison, has issued a broadside against actuaries, questioning their fees and their role in setting obligations for firms.
“Should hard-pressed schemes have to pay significant sums to actuaries for complex calculations of sums that in many cases they cannot afford to pay?”
Ellison asks in a recent letter to the Financial Times.
He asks: “What role should the actuarial profession take in
setting statutory or quasi-statutory obligations in the absence of the usual checks and balances, which could load significant extra costs on to employers, costs not envisaged when the pension scheme was set up?”
Ellison, who became NAPF chairman in May, was writing in response to an earlier letter in the FT from Ronnie Bowie, senior partner at actuaries Hymans Robertson.
Bowie had said that actuaries’ proposals regarding pension scheme transfer values - while possibly “over-complicated” - were still true and fair. “It is
government pensions policy that has to be examined,” Bowie
Ellison countered, saying: “Is it fair that a member can transfer out with a full ‘risk-free’ sum while remaining members face the risk of possible underfeeding, or an insolvent employer?”
He added: “The balance between protection of scheme members and encouraging employers to provide pensions is not an easy one to strike, but any suggested solution should bear in mind that the law of unintended consequences is inexorable.”