Past, Present and Future of the Pensions Actuary in South Africa
The role of the Pensions Actuary in South Africa has changed drastically over the past few decades. From the expert defined benefit valuator to the actuary checking the rules, financial statements and administration procedures to apply for exemption from statutory valuations and, by extension, not requiring any actuarial services whatsoever. Is this just the natural progression for the profession to move away from the traditional retirements field that we need to accept following to the predominant move from Defined Benefit to Defined Contributions Funds and lately the big move to Umbrella Funds?
While the underlying mechanisms and statutory environment may have changed, the fundamentals are unchanged from the days when the role of the actuary was deemed invaluable, i.e. saving over a working lifetime to ensure an income for life in retirement. The uncertain variables and risks in this equation is as relevant as ever, if not more, considering that added difficulty of managing risks at an individual level.
It is evident from the lack of research being done in the retirements field and the fact that no technical papers in the retirement field were submitted to be presented at this year’s ASSA Convention, that the actuary’s involvement in the retirement industry is currently shrinking. Not many students are writing the Pensions examinations and there are fewer Valuators with Practicing Certificates than ever before. Does this mean that actuaries are actively withdrawing from this field even though the Retirement Fund Industry is continuously growing in terms of number of members and assets under management?
We will hear from experienced experts who were there during the heydays of Defined Benefit Funds and their involvement in the Retirement Fund Industry then and how they view the landscape changes since. We will further hear what the more recently qualified actuaries and valuators have to say about their experiences and expectations as purely Defined Contribution Actuaries.
It is our view that Actuaries have much value to add in the Retirement Fund Industry into the future. Whether it will be in the Social Security space, personal financial planning, alternative investments for retirement specific investments/products or something entirely new. The challenges are real. Our challenge is to make the Pensions Actuary invaluable again and to reshape our role in the retirement industry for the better for all.