Fiona Matthews, chairman of the Staple Inn Actuarial Society, and managing director of LifeSight, Towers Watsons master trust solution, talks to Gemma Gregson about opportunities for actuaries, engaging with pension scheme members and diversity in the profession
Fiona Matthews began her career at Legal & General, working with insured final salary pension schemes. Upon qualifying in 1991, she quickly moved on to hold broader management roles at a number of insurance companies in the areas of life, product development, marketing and operations. In 2008, ready for a fresh challenge, she returned to pensions and joined Towers Watson, where she is currently managing director of the company's master trust programme across Europe, the Middle East and Africa.
Alongside her daily work commitments, Matthews also plays an active role at the Staple Inn Actuarial Society (SIAS), chairing the committee that governs it. Her involvement with the society began early in her career, when The Actuary was something more akin to a student magazine. Owned and published by SIAS, in collaboration with the Institute and Faculty of Actuaries (IFoA), The Actuary was reinvented during Matthews' initial term on the committee. SIAS appointed editors and a publisher, paving the way for the publication that we know today. It therefore seemed fitting that the role of SIAS would be the starting point for our discussion.
Founded in 1910, the organisation acts as the London Regional Society and supports younger members of the IFoA, particularly students and those with up to five years of post-qualification experience. In addition to arranging social gatherings, it organises professional events, where members can present papers and discuss topics of interest. These are designed to provide opportunities for networking as well as professional development. As Matthews says, "SIAS is a safe ground for younger members to develop broader, non-technical skills. It is also a good introduction to how the IFoA works, with a number of council members starting their professional lives with SIAS."
Supporting the ethos of developing the professional interests of younger members, the governing committee is made up primarily of members who are under 35 when elected.
Commenting on her involvement, Matthews is clear on her responsibilities. "As a previous committee member, my role as chairman is to bring experience and to assist with commercial decision making. However, it is also important to learn from the committee and maintain relevance to today. It is about recognising that times have changed since I was on the committee and taking on board new ideas to bring alive the objectives of SIAS."
It is a role she obviously enjoys: "I love mentoring, so it is a privilege to get involved with SIAS and see the younger people of the profession coming through."
Broad career paths
We talk about the challenges facing younger actuaries today and how they have changed over the years. "The pace of working life has increased and so the important skills are delegation and learning to prioritise, which need to be learned much earlier in careers." She adds: "Graduates have longer working lives to look forward to than previous generations and, with continued changes in social, economic and regulatory environments, there is a fantastic opportunity for younger actuaries to be involved in a broader range of career paths and to follow more than one. There is the need to be more strategic in thinking rather than specialising in a narrow field, and the actuarial qualification allows you to do that."
For Matthews, the actuarial qualification was a stepping stone to a management position, which led to further senior roles. She confesses to falling into actuarial work after an inspirational physics teacher persuaded her to study maths at university, and arranged some actuarial work experience for her. The pensions landscape has changed dramatically since those early work experience days and, as managing director of Towers Watson's LifeSight, she knows only too well the issues that some of those changes have created.
Changing face of pensions
In an environment where DC provision is increasingly costly and complex, many employers are looking to reduce the governance, investment, communication and administration burdens of running a scheme. "LifeSight is Towers Watson's DC multi-employer pension trust," says Matthews. "With an independent governance board, chaired by Donald Brydon CBE, it has been set up for employers who want a high-quality, low-risk alternative to running a scheme in-house. It offers all the best things you can do in a trust-based scheme. Under the remit of The Pensions Regulator rather than the Financial Conduct Authority, it has member interests at heart and can really engage with employees."
Matthews is passionate about member engagement, believing that it is the key to improving outcomes for members. With the closure of defined benefit (DB) schemes, the number of people with only DC pension provision is set to increase, which has led to an increased focus on DC outcomes. "Engagement is about helping employees to understand the value of the pension they have, it is about getting people to make pro-active decisions about their retirement plans and be conscious that they need to save early enough and invest in the right way," she says.
Many changes to the pensions landscape have occurred over recent years and we discuss the impact of those changes on actuaries. In keeping with the theme of member engagement, Matthews is keen to talk about the role actuaries could play in communicating complex pensions matters and the use of mobile technology to "help people become more in tune with pensions". She predicts actuaries will continue to have a role in DB schemes and also develop roles in areas such as product development and education. She also mentions that there are opportunities to help raise awareness of scams, and to educate school children about personal finance and planning for retirement.
"Scheme actuaries will be needed for a long time, and there is a broader strategy role for actuaries, whether in total reward or advising schemes on de-risking. The pensions flexibilities announced in the 2014 Budget provide a lot of opportunity for innovation that actuaries can be at the heart of."
A further key area for actuaries in the future will be modelling. "We are really good at modelling," she states, and imagines a scenario where the workforce ages as employees cannot afford to retire, which in turn could have a knock-on effect on younger workers, affecting the course of their career paths. She sees actuaries helping HR consultants with workforce planning, and supporting the government by using economic and commercial modelling to think about the implications for the wider economy of a changing workforce, particularly with regard to members of DC schemes and the way they invest their pensions. "It would be great for the profession to think about how to train and support actuaries to apply the skills they already have in a broader, more commercial, almost policy-making way."
No stranger to applying her actuarial skills more broadly, Matthews talks about her tenure as a non-executive director for Warrington and Halton NHS hospitals, when they secured 'foundation trust' status. She reflects on the risk management work they had to do as part of the process:
"It was about thinking about the issues with an actuarial mindset, challenging and asking questions and looking at how to present and analyse the information. It was powerful recognising how transferable actuarial skills are."
The diversity challenge
Moving away from her actuarial work, Matthews was a mentee on the FTSE100 Mentoring Foundation Programme after being nominated by Clive Cowdery, founder of The Resolution Group, and recently had the honour of attending a reception at Buckingham Palace for participants of the programme. The Mentoring Foundation is a cross-company initiative, where FTSE100 chairmen and chief executives mentor aspiring females who have been nominated from other companies. "It is a fascinating professional mentoring programme that can help mentees solve business challenges, identify their strengths and develop a network. The foundation is run by Peninah Thomson OBE, who is passionate about diversity and believes it is a cultural shift rather than a quota that is needed to create an environment that allows women to break through glass ceilings."
We talk about diversity within the profession and Matthews thinks that although there is a good gender balance at graduate level, she would like to see more female representation on some of the working parties and committees. "While gender is an obvious diversity issue," she says, "there are others, and having a diverse group of individuals with a spread of backgrounds, skills and personality traits can really make a difference to decision-making." However, drawing on her experiences of being on the Diversity and Inclusion Council at Towers Watson, she acknowledges that it is not something that can be achieved overnight.
"A diverse working group is far more powerful than a group of people with similar skills and experiences, but it takes commitment and perseverance to make it happen. What is needed is passion and a vision of where to get to and a plan for small changes, and it is those small changes that together can really achieve cultural shift."
Matthew's career has taken a varied course with roles in both the pensions and insurance sectors. She has played an active part in the actuarial community with her work for SIAS, as well as the non-actuarial community as a non-executive director on an NHS board. She has been both mentor and mentee, and so to wrap up our discussion, I ask what advice she would give to others.
"My advice is to take a risk, work outside your comfort zone and challenge yourself. If you take a risk, it is amazing what comes of it, you find out what you can achieve and it inspires you to do more."