First things first, a quick jargon buster to get you started in understanding actuarial roles in pensions: pension funds are a type of fund or scheme people will pay into to increment assets and ensure financial stability for their futures when they retire and no longer earn a salary.
Setting up a pension scheme involves varying levels of financial risk...These types of fund are susceptible to various factors such as developments in the law, changes in the investment market and in the requirements of trustees (the representatives of a scheme’s members) and the members themselves. Actuaries are the go-to guys who can tell their clients just what they might be letting themselves in for in all pension-related matters.
The importance of actuaries in pensions
Actuaries specialising in pensions implement data modelling and carry out calculations to help predict the risks companies face with providing certain pensions schemes. If you’re starting out in this field, you’ll learn the ropes as an analyst. They make logical predictions on the financial impact a scheme will have on a company based on the results of their calculations. Other responsibilities include working out transfer values (how much the value of a customer’s pension would be if they transferred it to a different pension scheme) and other data analysis tasks. With more experience, there will be more and more client interaction.
Alongside their complex analytical work, more senior actuaries may take the lead in one-on-one meetings with the client (who could be a member or trustee of a pension scheme, or an employer looking to provide or who already provides a work-based benefits scheme to employees) to provide advice based on the actuarial team’s research and reports. For example, they may help a scheme’s trustee (the person in charge of decisions on behalf of members of a pension scheme) to come to a decision on an investment.
Actuaries therefore clearly possess a great deal of mathematical ability. Logical thinking and reason are the name of the game! Big insurance and pensions companies and actuarial firms which have pensions departments are the main employers in this area; all options offer the chance to work with clients across various industries.
How can I become an actuary in pensions?
Graduate roles with actuarial firms are extremely competitive – it’s an attractive career destination for graduates with mathematical/science degrees, helped along by some top salaries (graduate starting salaries are around £35,000 and top actuaries can reel in six figure salaries!). Though degrees such as mathematics, financial mathematics, economics, or science subjects are sometimes preferred, any graduate with a high aptitude for numbers could be in with a shot in this industry.