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The Actuary The magazine of the Institute & Faculty of Actuaries

Faculty and Institute – income and expenditure 2004/2005

The majority of the work of the UK actuarial profession is conducted jointly by the Faculty and the Institute, and is organised through the board structure. Figure 1 shows the total expenditure of the UK profession in 2004/2005. Not unexpectedly, the major part of the expenditure is controlled by the Education and CPD Board, which has a wide-ranging remit that includes examinations, CPD events, research, the BAJ and libraries, and international education.

Nature of expenditure and income

Figure 2 shows the breakdown of the actual expenditure in terms of goods, services and other items. Figure 3 gives an analysis of the sources of the profession’s income totalling £12.4m in 2004/2005. As less than half is represented by subscriptions, any deviation from budget has a potentially magnified effect on subscription levels. This underlines the need for adequate reserves to absorb unexpected fluctuations.

Share of net expenditure

The net expenditure on joint activities is shared between the Faculty and Institute according to a ratio based on full rate membership numbers. The ratio for 2004/2005 was 14.4:85.6. The two bodies also incur expenditure on business related to their own activities, as indicated below (figures 4 and 5).

Use of funds

The joint working does not give rise to audited accounts as one entity. The total income and expenditure for each of the Faculty and Institute are reported in their respective accounts. Figures 4 and 5 show the proportion of each body’s expenditure spent on joint activities and on its own business.

  • The surplus in 2004/5 was achieved mainly through buoyancy in conference revenues and delays in disciplinary activities, neither of which factors can be relied upon to continue.
  • The principal upward pressures on costs in the medium term are staff pension scheme costs and the probable costs of the Morris recommendations.
  • Costs are regularly and thoroughly reviewed for sake of optimising the value for money for members generally.
  • Practising certificate fees are being increased in the interests of making a greater contribution to the cost of regulatory activities.
  • Our best medium-term view is that modest real increases in subscription levels are likely to be required.

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