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The role of the UMSS Scheme Actuary

Charles Cowling talks about his role as our actuary.

My role

Actuaries are experts in risk, finance and statistics. Every UK pension scheme must have a Scheme Actuary who advises and assists trustees on all aspects of their pension scheme. I am the Scheme Actuary for UMSS and about a dozen other pension schemes which are all quite different. I am also Chief Actuary at Mercer, so I have responsibility for much of our intellectual capital and professional standards.

A large part of my job is to consider risk. Pension schemes invest in a portfolio of investments which carry risk because the price of investments can go up and down. Some investment risk can be good as it may offer higher returns over the longer term. On the member payments side, there are risks linked to how long members will live, and what their pensions and other benefits will be in the future. We model possible outcomes and make assumptions about how cashflow in and out of the pension scheme is likely to develop. We use this to assess what the finances the pension scheme will need now and in the future.

Actuarial valuations

Every three years I help carry out an actuarial valuation of UMSS. This is an assessment of its financial position and it recommends the contributions that the University, and members, must pay to UMSS to ensure that benefits can continue to be paid. If there is a deficit in UMSS, the Trustees and the University must agree on the period over which the deficit will be repaid, and the Scheme Actuary then calculates the amount of the deficit payments that the University must pay.

The actuarial valuation is our primary way of assessing the health of the Scheme. We compare the assets of UMSS with its obligations to pay benefits to members and we report on how well funded it is. The other key factor in considering the security of members’ benefits is the strength of the University. A strong University means UMSS is better able to ride out the ups and downs of global investment markets and will be able to pay additional deficit contributions if that’s ever necessary. In the very unlikely circumstance that the University isn’t able to continue paying into UMSS, members are also protected by the Pension Protection Fund, which guarantees that the large part of members’ benefits can be paid.

About me

I joined Mercer in 1984 after completing a degree in mathematics and qualified as an actuary in 1991.

I am supported by another actuary, Ruth Eccleston, and a large team of analysts. Ruth provides actuarial as well as consulting and secretarial assistance to UMSS.

I am married with four children. Outside of work, I enjoy fell walking and running, and I have completed many marathons to raise funds for charities. I also act as a trustee for several charities and I chair the Brathay Trust, a charity based in Cumbria that supports vulnerable and disadvantaged children and their families. A keen singer, I am also currently a member of the Manchester Chamber Choir.