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Pensions, Funding and Risk

Published online by Cambridge University Press:  10 June 2011

R.J. Chapman ,
T.J. Gordon  and
C.A. Speed
R.J. Chapman
Affiliation:
Bacon & Woodrow, Parkside House, Ashley Road, Epsom, Surrey KT18 5BS, U.K. Tel: +44(0)1372-733395; Fax: +44(0)1372-733991; E-mail: richard.chapman@bacon-woodrow.com
T.J. Gordon
Affiliation:
Bacon & Woodrow, Colmore Gate, 2 Colmore Row, Birmingham B3 2QD, U.K. Tel: +44(0)121-262-5000; Fax: +44(0)121-262-5099; E-mail: tim.gordon@bacon-woodrow.com
C.A. Speed
Affiliation:
Bacon & Woodrow, Ivy House, 107 St. Peter's Street, St. Albans, Hertfordshire AL1 3EW, U.K. Tel: +44(0)1727-814200; Fax: +44(0)1727-814343; E-mail: cliff.speed@bacon-woodrow.com
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Abstract

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In this paper, we identify the economic system in which occupational pension schemes operate. This system includes all parties to the pension arrangement, particularly the members of the scheme and the shareholders of the sponsoring company. This requires us to model the pension scheme not as a self-contained fund, but simultaneously alongside the company, and to recognise its interaction with other parties with financial interests in the scheme. Under this method, the stakes of the various parties aggregate to 100% of the assets of the company including the assets of the pension scheme. The power of this approach is that decisions taken in relation to the management of the pension scheme can be assessed by the effect they have on the way in which the overall economic value of the company is divided between stakeholders.

Keywords

ActuarialPensionsFundingRiskFinancial EconomicsDeflators

Information

Type
Sessional meetings: papers and abstracts of discussions
Information
British Actuarial Journal , Volume 7 , Issue 4 , 01 October 2001 , pp. 605 - 662
Copyright
Copyright © Institute and Faculty of Actuaries 2001

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