Abstract
This abstract relates to the following paper: Cowling, C. A., Fisher, H. J., Powe, K. J., Sheth, J. P. and Wright, M. M. (2019) Funding defined benefit pension schemes: An integrated risk management approach. British Actuarial Journal, Cambridge University Press, 24. doi: 10.1017/S135732171800034X .
Highlights
Charles (Cowling), and his co-authors, are going to present the paper
F.I.A.): Our discussion is on the paper “Funding defined benefit pension schemes: an integrated risk management approach”
Charles (Cowling) has 30 years’ experience in pensions; first, at Mercer and Jardine Lloyd Thompson. He served for three terms on the Institute and Faculty of Actuaries (IFoA) council and has chaired the Pensions Board
Summary
[Institute and Faculty of Actuaries, Sessional Research Event, London, 13 November 2017]. On the one hand, financing a long-term cash flow obligation and, on the other, providing security for an important part of peoples’ personal savings This is illustrated by looking at the 5,800 remaining defined benefit (DB) pension schemes. Either they will pay their benefits in full or they will not and will end up in the Pension Protection Fund (PPF) The impact of this default risk is illustrated by some research carried out by the Pensions and Lifetime Savings Association (PLSA), which has shown the impact on members, even in schemes with a strong covenant, can be very significant. The MFR was the first real UK regulatory attempt to answer the dual challenge that Charles (Cowling) referred to earlier of how to finance the long-term cash flow obligation and to provide acceptable security for members’ benefits. This was a very different environment to the one that we see today, where 1-year or even 5-year recovery plans are not the norm
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