UK – The head of one the UK’s main actuarial bodies has rejected criticism of the profession made by the opposition Conservative Party.
Howard Flight, the party’s treasury spokesman had criticised actuaries for failing to do enough to prevent the current crisis in the UK’s pensions industry.
Tom Ross, the president of the Faculty of Actuaries, has hit back at Flight’s criticisms in a letter to the Financial Times. Flight had accused actuaries of not voicing concern over tax rules that lead to companies taking pension contribution holidays during the 1990s.
Actuaries had voiced concern, Ross says. “Not even an actuary can persuade a client to build up a surplus in its pension fund if the result is that tax will become payable that could otherwise be avoided,” Ross writes.
Ross also counters Flight’s assertion that actuaries did not write down the value of equity investments in the run-up to the technology boom of the late 1990s. “Those actuaries who adopted this approach were widely criticised as being absurdly cautious,” he adds.
Flight’s argument that funds should have bought bonds not equities, Ross says, would have seen 500 billion pounds of corporate debt issuance. This would have lead to a much higher debt to capital ratio, and higher risk, Ross says.
Ross’ salvo is the latest in an ongoing war of words taking place in the letters pages of the UK newspapers.