Skip to main content
The Actuary: The magazine of the Institute and Faculty of Actuaries - return to the homepage Logo of The Actuary website
  • Search
  • Visit The Actuary Magazine on Facebook
  • Visit The Actuary Magazine on LinkedIn
  • Visit @TheActuaryMag on Twitter
Visit the website of the Institute and Faculty of Actuaries Logo of the Institute and Faculty of Actuaries

Main navigation

  • News
  • Features
    • General Features
    • Interviews
    • Students
    • Opinion
  • Topics
  • Knowledge
    • Business Skills
    • Careers
    • Events
    • Predictions by The Actuary
    • Whitepapers
  • Jobs
  • IFoA
    • CEO Comment
    • IFoA News
    • People & Social News
    • President Comment
  • Archive
Quick links:
  • Home
  • The Actuary Issues
  • January 2014
01

PwC: real-time data missing from de-risking decisions

Open-access content Monday 20th January 2014

UK defined benefit pension schemes are continuing to miss out on opportunities to reduce risk because of a lack of information needed to track accurate and real-time valuations, PricewaterhouseCoopers said today.

Of the 150 DB schemes polled in PwC's annual pension scheme survey, just 11% said they have access to real-time asset and liability updates, making it difficult and expensive to track market opportunities and monitor pricing triggers. It highlighted that delays in information could make the difference between a deal going through or not, and whether the price the deal was executed on is commercially sound.

Raj Mody, head of pensions at PwC, said: 'The uncertainty over just how much companies will need to pour into their pension schemes to manage their deficits means many are looking at opportunities to remove the risk from their balance sheets.

'There is strong appetite in the market for risk transactions, such as buy-ins, buy-outs and longevity hedging. We know pension schemes representing over £100bn of liabilities are currently considering some form of third-party de-risking transaction, but whether this interest converts to deals will depend on a number of factors. One of the barriers will be schemes not having access to accurate information when they need it, meaning they can't get the most effective terms for the deal, or in some cases deals not going ahead.'

According to Mody, schemes looking to transact need to be able to monitor their position accurately enough on a regular and rapid basis. He said: 'Buyout tracking presents a particular challenge, as insurer pricing captures nuances in market movements that lie beyond most daily funding tools.

'This means it can take several weeks or months for useful information to become available, by which time opportunities pass. This no longer needs to be the case as technology developments for companies and trustees means they can now have direct access to the information they need, enabling them to execute a risk reduction deal at an attractive time and price,' he said.

Mody added that 'off-the-shelf' scheme actuary's estimates of buy-out could often be overstated, containing margins for prudence.

'For schemes where de-risking is on the agenda, it pays to be able to track more accurate valuations which reflect currently available commercial pricing. This approach is more likely to lead to better informed decisions and quicker deal execution.'

This article appeared in our January 2014 issue of The Actuary.
Click here to view this issue
Filed in:
01
Topics:
Pensions

You might also like...

Share
  • Twitter
  • Facebook
  • Linked in
  • Mail
  • Print

Latest Jobs

Actuarial Associate Consultant (UK-wide)

England, Manchester, Greater Manchester / England, West Midlands, Birmingham / England, London
£35000 - £53500 per annum + DOE + bonus + benefits
Reference
120865

Origination/ Pricing Analyst (Bulk purchase annuities)

London, England / London, City of London, England
£55000 - £75000 per annum + DOE + bonus + benefits
Reference
120864

Covenant Consultant

Leeds
£60-80k plus bonus and benefits
Reference
120863
See all jobs »
 
 

Today's top reads

 
 

Sign up to our newsletter

News, jobs and updates

Sign up

Subscribe to The Actuary

Receive the print edition straight to your door

Subscribe
Spread-iPad-slantB-june.png

Topics

  • Data Science
  • Investment
  • Risk & ERM
  • Pensions
  • Environment
  • Soft skills
  • General Insurance
  • Regulation Standards
  • Health care
  • Technology
  • Reinsurance
  • Global
  • Life insurance
​
FOLLOW US
The Actuary on LinkedIn
@TheActuaryMag on Twitter
Facebook: The Actuary Magazine
CONTACT US
The Actuary
Tel: (+44) 020 7880 6200
​

IFoA

About IFoA
Become an actuary
IFoA Events
About membership

Information

Privacy Policy
Terms & Conditions
Cookie Policy
Think Green

Get in touch

Contact us
Advertise with us
Subscribe to The Actuary Magazine
Contribute

The Actuary Jobs

Actuarial job search
Pensions jobs
General insurance jobs
Solvency II jobs

© 2021 The Actuary. The Actuary is published on behalf of the Institute and Faculty of Actuaries by Redactive Publishing Limited, Level 5, 78 Chamber Street, London, E1 8BL. Tel: 020 7880 6200