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Funding Defined Benefit Pension Schemes

Published online by Cambridge University Press:  10 June 2011

C. A. Cowling ,
T. J. Gordon  and
C. A. Speed
C. A. Cowling
Affiliation:
Mercer Human Resource Consulting, Clarence House, Clarence Street, Manchester M2 4DW, U.K., Tel: +44(0)161-832-5688, Fax: +44(0)161-837-6594, Email: charles.cowling@mercer.com
T. J. Gordon
Affiliation:
Hewitt Bacon & Woodrow, Colmore Gate, 2 Colmore Row, Birmingham B3 2QD, U.K., Tel: +44(0)121-262-5000, Fax: +44(0)1372-845-082, Email: tim.gordon@hewitt.com
C. A. Speed
Affiliation:
Hewitt Bacon & Woodrow, Prospect House, Abbey View, St. Albans AL1 2QU, U.K., Tel: +44(0)1727-888-677, Fax: +44(0)1727-814-343, Email: cliff.speed@hewitt.com
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Abstract

This paper puts the case for the Actuarial Profession revising and tightening its standards on actuarial funding advice in relation to United Kingdom occupational pension schemes. We critique current actuarial practice and advocate principles for measuring solvency and providing funding advice. In particular, we advocate that funding targets should be clearly and unambiguously related to scheme solvency. The paper also covers optimal investment strategy, treatment of the ‘company covenant’ when giving funding advice and governance issues relating to pension schemes.

Keywords

ActuarialPensionsFundingRiskSolvencyValuation
Type
Sessional meetings: papers and abstracts of discussions
Information
British Actuarial Journal , Volume 11 , Issue 1 , 01 April 2005 , pp. 63 - 97
Copyright
Copyright © Institute and Faculty of Actuaries 2005

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