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The Actuary The magazine of the Institute & Faculty of Actuaries

Q&A: On my agenda: Charles Cowling

Yvonne Wan talks to Charles Cowling of JLT Pension Capital Strategies about his work with the actuarial profession and his charitable activities

01 MAR 2012 | YVONNE WAN

Curriculum vitae
Charles Cowling is managing director of JLT Pension Capital Strategies, established in 2006 to help companies manage their defined benefit pension obligations. He has over 25 years’ experience in the actuarial profession and has been the principal actuarial adviser to several FTSE100 companies and their pension schemes.
Cowling is a member of the Council of the Institute and Faculty of Actuaries, chairman of the Discount Rates Steering Committee and a member of the Conflicts of Interest Working Party. He was previously chairman of the Pensions Practice Executive Committee. He is also Junior Warden of the Worshipful Company of Actuaries.

Actuaries of the future are going to have to be much more flexible.
Why did you become an actuary and how did you get to where you are today?
I became an actuary after a visit to the careers library at school. Maths was really the only subject I enjoyed and being an actuary was top of the list of careers for mathematicians. I started work in 1984 with Duncan C Fraser & Co in Liverpool (later the Liverpool office of Mercer), which gave me a strong grounding and many opportunities. In 2006 I left to join JLT and create a new business, Pension Capital Strategies, focused solely on advising employers, which has gone from strength to strength.

How has the role of actuaries changed since you joined the profession?
The most obvious change is in the volume of rules and regulations, which, unfortunately, creates a tick-box mentality. Also, pensions actuaries are much more in the spotlight now that the large surpluses of the 1980s and 1990s have been replaced by large deficits. The pressure is on to guide clients through some very difficult issues.

You are a member of the Council of the Institute and Faculty of Actuaries. What motivates you?
When I joined Council nearly 10 years ago, I wanted to help push the boundaries of actuarial thinking and knowledge. The opportunity to join the Pensions Board and be part of some important debates was very appealing and proved really stimulating. I believe our profession is hugely important and I know I owe a huge debt to it – one I would like to try to repay, at least in part.

What are the biggest challenges facing the actuarial profession and how will this change?

Responding to the huge changes in the environment for pensions and insurance. There is the immediate problem of how we react to the financial storms that threaten the stability of the institutions we advise. But, in the longer term, we must also reinvent ourselves, both personally and as a profession, as the traditional work of actuaries fades away and as we also face up to a lot more global competition. Actuaries of the future are going to have to be much more flexible and look beyond the narrow confines of pensions and insurance to new areas such as enterprise risk management.

What impact do actuaries have on consumers and society?

Most people are directly affected by the work of actuaries, in particular, through pensions and insurance products. Actuaries still command an enviable reputation right across the financial services sector. Moreover, actuaries are seen as people who have the skills and insight to help our society manage its way through the problems we now face.

Are you concerned with the level of pension provision in the UK?
I am concerned at the high level of debt and low level of personal saving in the UK, but not pension provision specifically. We have to accept that pensions are just one part of overall savings and that lifestyle patterns are changing. On the level of pension provision, my concerns lie more with members’ poor understanding of pensions.

What are the top three issues facing pension schemes and their trustees / sponsors?
The first is risk of failure. Many people’s life savings are wrapped up in their pension schemes and we need to do all we can to ensure that we deliver on the promises that have been made. The Pension Protection Fund (PPF) provides some protection but not enough.

The second is sorting out significant data deficiencies as we head towards eventual closure of pension schemes. This will require a massive effort to sort out holes in records. Unfortunately, we are going to have to sort out Guaranteed Minimum Pension (GMP) reconciliation and equalisation too.

In third place is trustee governance. This is not just about conflict with employers and the dearth of employee members prepared to act as a trustee but also about the trustee decision-making process. It is increasingly important to react quickly – a quarterly meeting structure simply isn’t good enough.

Do you think actuaries have a wider role to play in financial services?

Understanding and management of financial risk is hugely important right across society. We are better placed than anyone else to support the management of this risk. The opportunities are there – we just have to grab them.

You are the Junior Warden of the Worshipful Company of Actuaries (WCA). Tell us more...
The WCA is one of the livery companies of the City of London, which date back to the 12th century and were established to control trade in the City of London and support the Lord Mayor. Today, they still have a vital role showcasing the City to a global audience and promoting the financial services sector. I love the pageantry and ceremony, which continue to this day, and the opportunity for fellowship across the profession. But, for me, the most important activity is our charitable work.

What fundraising activities have you been involved in and are there any upcoming events?
I get involved in many smaller events for schools and churches, but I have foolishly agreed to run my first marathon for charity this year. Then, next year, I plan to take a group of actuaries to walk England’s coast-to-coast route.

What has been your greatest professional challenge to date?
It’s hard to pick just one when many seemingly ended in failure. One example was trying to get the investment community to embrace the ideas we developed when advising the Boots pension scheme to switch out of equities into bonds in 2001. Another was trying to persuade colleagues that solvency and security of benefit provision should be at the heart of advice around funding pension schemes.

Lastly, it was really tough trying to get acceptance for a new standard on transfer values (EXD54) that would ensure transfer values represented ‘fair’ value. The problems with the legislation that replaced GN11 are becoming increasingly apparent with the concerns around enhanced transfer values.

What are your professional and personal ambitions?

I would like to help us manage the sad demise of defined benefit pension schemes and help position my firm, and the Profession, for the many challenges the future undoubtedly holds. At a personal level, the toughest ambitions relate to my children and how I can help them to be happy, fulfilled and, hopefully, a force for good in the world.

How would your friends and colleagues describe you?
Loyal, supportive, positive and cheerful, I hope – but I’m sure there would be many less flattering comments!

What advice would you give aspiring actuaries?
I am a great believer in writing a CV every year; it is a great way of looking at what you’ve learnt and what you want to add to that.

If you could choose an alternative vocation, what would you do?
I wanted to be a pilot – but colour blindness meant I failed the medical for the RAF. If I had been good enough, I would have loved to be an opera singer.

How do you spend your free time?
I love walking and music. But, best of all, is quiet time with my lovely and long-suffering wife, Becky, and our four wonderful children.


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