Welcoming all efforts on the right to reply
Good, bad and ugly theory
I was interested in Jessica Elkin's article (Student, p39) in the March edition of The Actuary. This has been a subject close to my heart for a number of years since reading a proposal by one of the Big Four accountancy firms for 'product placement' of accountants in movies - as is done by certain watch and car manufacturers in James Bond films! I wondered if this would work for actuaries and since then have looked out for portrayals of actuaries in the movies.
Many of those who have qualified in the past 15 years will be aware of the use in the new qualifiers' professionalism course of the video of The Billion Dollar Bubble as an example of unprofessional behaviour. In this 1970s' TV movie, James Woods played an actuary who got caught up in a scandal involving reinsurance on (fictitious) life policies to shore up the corporation's finances. He is definitely not a good role model, although probably the second most famous actor to play an actuary after Jack Nicholson in About Schmidt.
In many ways, given the lack of public knowledge of actuaries, it is surprising how often they feature. I believe that Double Indemnity (1944) was the first film to feature an actuary. The plot revolves around a murderer who seeks to gain advantage from a rather peculiar insurance policy. An insurance investigator, Edward G Robinson, knows the actuarial statistics and becomes suspicious.
Other movies to note, apart from those mentioned in the article, include The Apartment, Sweet Charity, Tron (featuring an actuarial programme named Ram), Thirteen Conversations About One Thing, and Along Came Polly, where Ben Stiller is a risk assessment expert, who, though not explicitly stated, performs the job of an actuary.
I would agree that most of the actuaries presented are not role models - could it be the association with mortality?
Keith Miller, 7 April
Limits to growth only a starting point
In response to the letter from Geoff Dunsford (Earth is Room Enough, April, p6), the motivation for the limits to growth research was to examine issues of resource scarcity, which the Resource and Environment Group (REG) feels have not been sufficiently examined. The intention was to start a debate on this difficult subject, not to attempt to provide all the answers. We welcome a discussion and recognise that there are many points of view. As Mr Dunsford points out, one of our strengths as actuaries is to base our thinking on data. Sometimes this means questioning conventional wisdom, when the data suggests this is a wise thing to do.
Also, I would like to clarify REG's role. The limits to growth research project was carried out by a team of experts including an economist and led by Dr Aled Jones at the Global Sustainability Institute at Anglia Ruskin University. REG members reviewed the report, but did not have a right of veto over any part of it. One of the research team members was an actuary and REG member, but was acting in an independent capacity, not as a representative of the Institute and Faculty of Actuaries. The report contains a large volume of data on resource availability and we hope it will be a useful contribution to thinking. But it is not, and should not, be REG's role to justify every part of a piece of commissioned research. This project is only a first step on the road to investigate these issues, and much further work is needed. Hopefully, in time, actuaries will be experts in the critically important areas of resources, growth and sustainability.
Tracey Zalk, REG managing committee member, 19 April
DC pension plans 'badly designed and poorly modelled'
(Full story at bit.ly/10hCHjl)
"I never realised that DC pensions were ever meant to be well designed, just a low-cost pension provided by employers that stood virtually no chance of providing a decent pension, unless the employee paid around three times as much as their employer. From a self-employed viewpoint, or a director with an apparently bottomless pension pot, the principles seem great, but rather scary for the person in the street."
David Nunns, 29 March
EU pension rule changes 'could push up UK deficits to £450bn'
(Full story at bit.ly/ZkxHsr)
"These are worryingly large numbers, but shouldn't the Institute and Faculty of Actuaries be approaching this with its 'public interest' hat on? We are quite used to advising trustees and sponsors, but perhaps we should be talking directly to members here. The fact that there is a deficit on the 'holistic balance sheet' acknowledges the very significant risk that members' benefits will not be paid in full. The report acknowledges that (at least on this basis) schemes 'have in principle exhausted the possibility to use sponsor support to recover the present deficit'. The report also shows how inadequately UK schemes are funded relative to the rest of Europe (except Ireland)
There is a legitimate public policy debate around whether this is the best approach to valuation, and about what action should be taken. However, we need to avoid the impression that this is all about presentation: there is a very real risk the fund assets prove wholly inadequate to pay promised benefits."
Derek McLean, 10 April