Fields of Work - Pensions Consultancy

4th August 2023

Unlocking a Rewarding Career: The Life of a consulting pensions actuary
Pensions actuaries play a vital role in ensuring the security of millions of retirees’ retirement benefits, by working with sponsors and trustees of pensions to help them manage the risks associated with those schemes. Not only does a career as a pensions actuary, in a constantly evolving economic and regulatory environment present unique and varied challenges, it also equips professionals with a diverse skill set that can be applied across various industries. If you are seeking a career path that combines analytical prowess, business acumen, communication skills and a strong desire to make a tangible impact on people's lives, look no further than the dynamic and rewarding world of pensions actuarial consulting.

What is a Pensions Actuary?
A pensions actuary is a specialised actuary who focuses on the design, funding and management of pension schemes. 
They utilise mathematical and statistical models to assess the financial stability of these plans, taking into account factors such as investment returns, inflation, and life expectancy. Their work ensures that pension schemes can meet their obligations to retirees, while also helping companies and organisations manage the costs associated with providing retirement benefits.

What's Involved in Being a Pensions Actuary?
Analysing pension plans: Pensions actuaries are responsible for analysing existing pension plans, as well as proposing new schemes or modifications to ensure they remain financially sustainable. They examine scheme funding levels, evaluate the performance of investments, and determine appropriate contribution rates for both employers and employees.

Risk assessment: One of the key responsibilities of a pensions actuary is to identify and quantify risks associated with pension schemes. They help stakeholders develop strategies to mitigate these risks and ensure the long-term security of the schemes they work with.

De-risking transactions:  The increasing cost of UK pension schemes in recent years has resulted in stakeholders often wanting to pass key risks to an insurance company, either through the form a bulk annuity contract (known as a buyin) or through a risk transfer known as a longevity swap. Pensions actuaries are increasingly involved in broking such transactions.

Regulatory compliance: Pensions actuaries must be well-versed in current pension regulations and ensure that plans meet legal requirements. They play a crucial role in advising stakeholders on how to comply with these regulations while maintaining the financial stability of their pension schemes.

Communication: A consulting pensions actuary must be able to communicate complex financial concepts to non-experts, such as trustees, company executives or individual plan members. 

Skills Required for a Pensions Actuary:
Strong mathematical and analytical skills: As the cornerstone of an actuary's work, a strong foundation in mathematics, statistics, and probability is crucial for understanding and solving the complex financial challenges that arise in the field of pensions.

Attention to detail: Actuaries must be meticulous when analysing data and carrying out detailed analysis, as even the smallest errors can have significant financial repercussions. A keen eye for detail is essential for ensuring the accuracy and reliability of analysis.

Problem-solving: Pension actuaries are often presented with complex problems that require innovative solutions. A strong aptitude for problem-solving, coupled with creativity and adaptability, is key to navigating the constantly evolving landscape of pensions management.

Communication and interpersonal skills: Actuaries must be able to communicate complex concepts and findings effectively to a wide range of audiences, both in writing and through presentations. Strong interpersonal skills are also important for building relationships with clients, colleagues, and regulatory authorities.

Business acumen: A deep understanding of the business environment and the financial implications of pension plans is essential for a successful career as a pensions actuary. Actuaries must be able to apply their technical knowledge to real-world situations and provide strategic advice to clients.

Entry Routes for a Pensions Actuary:
The typical entry routes into a career in pensions actuarial consulting are:
  • Summer internship or work experience programmes offered by many consultancies – for example LCP runs a 6-8 week programme each summer. Internships provide a great insight into the profession and also provide an opportunity to show your aptitude which can result in longer-term job offers.
  • Graduate / early career programmes – Again, most major consultancies will expand their teams each year through graduate / early career processes. Often these are aimed predominantly at recent graduates. However many firms, including LCP, will consider any applicants with relevant skills and a passion to get involved in the profession.

Given the complex nature of the field, some consultancies may have minimum academic requirements to apply for such roles. Numerical degrees may naturally be preferred but are not essential. 

Advice / recommendations
  • Do not assume all actuarial roles are the same, consulting actuarial roles (such as in pensions) are likely to be quite different to non-consulting roles and require a greater emphasis on communication skills. Consider carefully what sort of role is best for you.
  • Over recent years pensions have become increasingly front-page news. Explore recent pensions topics both in national and trade press, find out about the sorts of challenges we face. This can help you consider whether it could interest you and also provide good ammunition for future interviews.

About the Author

Ian Farrand
Partner and Actuarial Pensions Consultant

Ahead of graduating from my mathematics degree at Nottingham University, I began considering my career. I knew I wanted my career to use my skills in maths and critical thinking, but also knew I didn’t just want a technical role – I wanted to work in a field that involved working with others. Having explored the options, a career as a consulting actuary seemed a potentially good fit. 

I joined LCP as a summer intern in 2002, keen to learn more, and thoroughly enjoyed my 8 week internship. It confirmed my thinking in relation to being a good career path for me, and I was lucky enough to be offered a graduate role. I started my graduate role in 2003 and have been at LCP for 20 years now – having never looked back.

Today I am a partner in the firm, with a wide range of clients and responsibilities. I am specialist in providing strategic advice around pension scheme funding as well as de-risking solutions. In addition, I head up LCP’s early career recruitment, looking to find the best talent to expand our teams and provide the partners of the future.

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