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Annie Hayes

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Actuaries under attack for misleading pension schemes

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According to a report due to be presented to the Institute and Faculty of Actuaries, actuaries have failed work pensions by routinely factoring in strong future investment growth, on calculating whether or not schemes will be able to afford to pay their members.

The report, written by Mercer Human Resources and Hewitt Bacon & Woodrow, claims that this practice leads to misleading valuations of a scheme’s solvency, gives savers a “false sense of security” and is not in the public interest.

It recommends that actuaries should change the way that they typically calculate whether or not a scheme is fully funded, and that they should only be declared to be so if there is enough money and investments for all a scheme’s members to receive their full pension entitlements.

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Annie Hayes

Editor

Read more from Annie Hayes
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