An initiative from 2011 to get employers ready for auto-enrolment!

First Actuarial always  ahead ! I hope that continues.

On Thursday I am going to the first First Actuarial conference when it’s owned not by Gallaher and not by its Founders. I hope that I will see continuity, my ten years at First Actuarial taught me about collective investment to pay pensions.

They were ahead of the game in broadening retirement savings back in 2011, warming up over one million employers to what would be coming over the next eight year. I pick that as the first innovation I saw with them after I joined a couple of years before. Auto enrolment is part of First Actuarial’s heritage, they dealt with it a little differently – in a  little more down-to-earth manner!

FABI

The First Actuarial Best Estimate Index or FABI as it came to be known , is the second I pick out as “heritage”.

This blog hosted many monthly reports on the state of our DB pensions if reported an ongoing surplus right through the bad years for defined benefit pensions using the

This chart takes you to early January, it showed that pension schemes need not be propped up by LDI (which later in the years exploded). It showed that fundamentals in DB were sound. There had been others explaining how “best estimates” explained this – here are Keating and Clacher in 2020.

Little credit is given to First Actuarial for their controversial FABI reports that came out for many years. I hope that their unconventional but right-thinking reporting will continue.

CDC

CDC was the third First Actuarial innovation and  the third achievement that’s part of the  heritage I experienced.

When things were at their worst at Royal Mail and the unions (mainly the CWU but others too) were all but calling 140,000 postal workers out as pension accrual  was replaced by DC pots for new joiners.

First Actuarial advised many unions, including CWU and attended the meetings alongside much larger actuarial consultants. Hilary Salt and Derek Benstead proposed that rather than go on strike, the workforce could have a DB like pension scheme while Royal Mail got a Defined Contribution bill each month. The only difference was that new system would be based on a non-guaranteed benefit which while targeted could be more or less than a DB scheme.

I am pleased that First Actuarial produced a reminder that it was they and the CWU who came up with this solution which did avert a strike and opened the door to new legislation to help Royal Mail see this through. Hilary and Derek have recently retired but my obsession with continuing the progress of CDC (for this is what they called it) came from their thinking.

Here’s their case study which you can download from First Actuarial’s website.

Terry Pullinger

There is one other person who must be mentioned – Terry Pullinger. He worked as Deputy General Secretary of CWU but to me he is the face of a side of First Actuarial that I hope will not be lost. He is quoted below…