The actuarial profession is setting up a number of committees with the Treasury and the DSS to examine wider investment and funding issues.
The move follows issues raised by the fast-track response of the so-called “Myners committee” to the Treasury.
The four-strong Myners committee met with senior Treasury officials at the end of last month to brief civil servants on its formal response to economic secretary to the Treasury Melanie Johnson.
A meeting is understood to be taking place later this month, after which follow-on work will then by divided up among the relevant government departments as follows:
* Investment principles for pension schemes will be undertaken by the productivity team at the Treasury, spearheaded by department members John Kingman and Daniel Oppenheimer.
* The investment processes for pension schemes will be undertaken by Paula Diggle’s successor, head of the Treasury’s home financial services team Stephen Meek.
* Security of pension fund promises will be undertaken by the DSS.
Myners committee member Tony Osborne-Baker – senior investment actuary at Deloitte & Touche – said no government team was taking a holistic view of Myners and, with an impending election, there was probably little current de facto ministerial “ownership” of the constituent parts of the post-Myners programme.
He said: “On the matter of the consultation on investment principles, officials will work on the responses and draft the final version of the principles, but there is likely to be a short delay during June in obtaining Ministerial clearance owing to the election.”
He added: “The principles recommended by Myners are unlikely to change substantially unless someone – e.g. the actuarial profession – comes up with radical new approach such as applying the principles to all forms of pensions including contract-based schemes. There is likely to be a review of the principles in two years time.“
The committee consists of representatives the different disciplines underpinning the joint council of the Institute and Faculty of Actuaries.
Osborne-Barker is joined on the committee by Faculty and Institute Management Committee representative and FoA president David Kingston, pensions board representative and Bacon & Woodrow associate Tim Gordon, and life board representative and Barclays Life director and appointed actuary Ian Balls.
Osborne-Barker said following the meeting last month he was concerned that a number of Treasury officials had not appreciated the risk that the resulting regime to replace the MFR could be more stringent and require schemes’ to increase funding levels.
Commentators have warned that the danger of this uncertainty in the short-term could be an increased number of schemes who are thinking of transferring from defined benefit to defined contributions making the change sooner rather than later to avoid an increased funding requirement post-MFR.
By James Wallace