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This article highlights the opportunities and challenges that exist in the pensions sector – and what this could mean for the graduates and actuarial careers of the future.

Changes in the sector

Actuarial techniques are continually evolving and being applied in more and more sophisticated ways. The ability to match up projects, appropriate actuarial techniques and the needs of your client requires an in-depth understanding of both your specialism and your client.

The range of work has widened and the need to communicate issues and solutions is a genuine challenge. The world is taking more and more notice of the need and difficulty of saving for retirement. A key role for the pensions actuaries of the future will lie in leading the way to identifying, communicating and presenting solutions to both clients, governments and to the wider public.

Education and learning

The pensions industry is a complex area which is constantly evolving. New graduates need to gain a thorough grounding in the pensions world and understand why it exists as it is. The early years of your career are vital in building up this knowledge and understanding.

The exams for actuarial qualifications help to bed down the key concepts and the best graduates use the exams as a springboard to apply and extend their knowledge. Some students now study part of the actuarial exams through a part-time university-based course and many find this helps to put actuarial work into a business context as well as enabling them to build up a strong network within the industry.

The current environment: challenges and opportunities

The pensions sector is not without challenges (or opportunities, depending on how you view these things):

  • The economic environment is tough, but many of our clients see the value that pensions actuaries add – particularly in helping them to manage the financial risks associated with their pension funds.
  • The bread and butter work of years gone by will inevitably start to reduce as many final salary schemes have closed or are closing to new members. The opportunity exists to broaden the range of work we can provide to clients and also shape the future of pension provision (and indeed benefit provision) more widely. Graduates who are flexible and embrace the changing face of the sector still have the chance to make a big impact.

The impact on the graduate job market

The graduate job market is tough and as things stand, the number of graduates being recruited and trained as pensions actuaries in the UK will fall in the coming years. At first glance, this may sound a daunting prospect, as it will inevitably be a more competitive recruitment environment. However, graduates who demonstrate the aptitude, the attitude and the drive to become a pensions actuary will increasingly be expected to progress their career quickly and develop consulting skills earlier in their careers than those who have gone before.

For example, an increasingly common business model is for the employers of pensions actuaries to move the tried and tested – mainly calculation-based – pensions work to ‘offshore’ locations. This leaves the ‘onshore’ team to focus on delivering bespoke work and projects.

The future of the pensions sector – Career prospects

A grounding in pensions actuarial work provides a good base from which to expand your career. The people in the industry who are making the most from their careers are those who embrace change, are open to new opportunities and push themselves out of their comfort zone.

Actuaries can go down a variety of career paths such as:

  • Specialising their actuarial/consulting skills to advise either companies, trustees or public sector clients.
  • Joining specialist teams, for example driving thinking and techniques used in the area of consulting on the issues of increased longevity, or focusing on the lively space of corporate transactions.
  • Developing strong careers in less technical (but key business) areas of sales, people management, project management and communication.

Quite often people combine all of the above – mixing a specialism with business management responsibility. There are many combinations of things in which you can get involved if you are proactive and willing to put yourself forward.

Traditional skills, new approaches

Some things do not change. The pensions actuaries of today need to be every bit as numerate and capable of learning the technical skills that underpin ‘being a good actuary’ as has always been the case. In addition though, the pensions actuary of the future needs to be willing and able to evolve and to apply their skills in a changing market-place. It’s a challenge that the best graduates will relish.

About the Author

  • Name: Alex Jefferson

Alex Jefferson qualified as an actuary in 2009 with Aon Hewitt and now works on a variety management projects in addition to his actuarial consulting work.

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