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The Actuary The magazine of the Institute & Faculty of Actuaries

Discount rate research project

The Management Board of the Actuarial Profession is undertaking a thought leadership cross-practice research project on discount rates. Part of this project has been the commissioning of objective research on current practice in this area. The timing for this research is particularly appropriate as there is a convergence of interest in discount rates from within and outside of the Profession.

Discount rates are at the heart of most actuarial calculations and therefore are also of significant public interest. In order to be able to continue to speak clearly and with authority in future debates, the Profession needs to have a clear and common understanding of the issues surrounding the different discount rates used today across practice areas and to help in the development of frameworks for the future that will support actuaries in communicating impartially and effectively.

The Management Board has set up a small cross-practice steering committee chaired by Charles Cowling to drive the project. The call for research went out in early December with a closing date for proposals in early January. The successful proposal is being led by Chinu Patel and Chris Daykin with a team of more junior researchers associated with Cass Business School, Imperial College and Dublin City University. Chris was, until September 2007, the UK Government Actuary and Chinu was a partner/senior consultant in a leading global pension consultancy. Both are now sole practitioners. The preliminary output from the project will be ready for a forum of thought leaders across the Profession and externally on 23 March 2010.

For further information, check the research page on the Profession’s website, which can be found at www.actuaries.org.uk/knowledge/research