Lessons from Closure: An Analysis and Comparison of the Issues Facing Closed Life Funds and Closed Pension Schemes

• Published in: British Actuarial Journal Vol. 12; no. 3; pp. 639 - 711
• Main Authors: Campbell, A. C., Grimley, D. C., Pallister, J. K., Stoker, A. M., Walton, A. R., Yiasoumi, C. A.
• Format: Journal Article
• Language: English
• Published: Cambridge, UK Cambridge University Press 01.09.2006; Institute of Actuaries and the Faculty of Actuaries
• Subjects: Actuarial science; Business structures; Employee pension plans; Financial investments; Funding; Investment strategies; Pension funds; Pension liabilities; Pension plans; Pensions; Sessional meetings: papers and abstracts of discussions; Solvency; Sponsor Covenant; Closed Fund; Closure; Life Insurance; Funding; Wind-Up; Run Off Plan; Investment
• ISSN: 1357-3217; 2044-0456; 1748-5002
• DOI: 10.1017/S1357321700004645

An observer of the United Kingdom financial services scene over the last few years will have noticed the rising numbers of closed with-profits funds and final salary schemes closed to new entrants. Closed funds were not previously unheard of, but until recently most life insurance and pensions actuaries would not have come across them in their daily work. There can be no doubt that, when compared to open funds, the closed variety have different characteristics and their financial management requires different approaches. Life and pensions actuaries tend to operate in their own separate fields, largely oblivious to what their fellow actuaries in other practice areas are doing. The growth of closed funds gives the two major branches of the U.K. actuarial profession an ideal opportunity to explore what we can learn from each other. I am very grateful to the authors for tackling this subject on behalf of the profession and hope that it will be the first of many examples of useful cross-fertilisation of ideas.