Occupational pensions

GAD provides actuarial advice to a number of UK occupational pension schemes, including some of the largest pension schemes in the country.

We have been advising many of the public service schemes for many decades, including the schemes for teachers, the National Health Service, and the armed forces.

We advise a number of funded pension schemes in the wider public sector and the private sector. Commonly, these are schemes which have moved from the public sector, such as schemes in the coal and rail industries.

We also advise governments and public sector organisations in other countries on their public sector pension arrangements. GAD can help you with:

  • compliance (including Scheme Actuary) services for defined benefit schemes, both unfunded and funded
  • consulting services for trustees and managers of defined benefit and defined contribution schemes
  • advice to sponsors of pension arrangements
  • scheme design and reviews
  • accounting for pension costs
  • strategic investment reviews

Public sector pension schemes

GAD provides actuarial advice to many of the UK public service occupational pension schemes, including schemes for teachers, the National Health Service, and the armed forces.

Our advice is usually provided to the managers of the scheme. Enquiries about public sector pension schemes from scheme members, the general public or the pensions industry should first be addressed to the relevant scheme’s managers or administrators.

We advise government departments on guarantees, or other obligations, in respect of public sector (or formerly public sector) pension schemes.

Funded pension schemes

GAD advises a number of funded occupational pension schemes in the wider public sector and the private sector. Commonly, these are schemes which have moved from the public sector, such as schemes in the coal and rail industries.

We advise some of our clients in a formal “Scheme Actuary” role, as required under the Pensions Act 1995. We also advise statutory schemes which are exempt from the legislative requirement to appoint a Scheme Actuary. We provide a similar range of services in each case.

We advise both single-employer and multi-employer pension schemes.

Our advice is usually provided to the scheme’s trustees or managers. We also advise some sponsoring employers regarding accounting for pensions costs and other matters.

Contact us

To discuss your requirements, please email enquiries@gad.gov.uk or phone +44 (0)20 7211 2625.

Pensions policy and regulation

GAD provides actuarial advice to the UK Department for Work and Pensions (DWP) on government policy affecting occupational pension schemes. We also advise on the regulation of pension schemes (Pensions Regulator), and we report on the terms for contracting out of the state second pension and produce for HM Revenue & Customs tables for calculating the maximum income for income drawdown arrangements in relation to unsecured pension funds and alternatively secured pension funds.

The GAD pensions policy team also provides support on a number of the Government Actuary’s statutory responsibilities, including:

  • the Government Actuary’s report to parliament on the terms for contracting out of the state second pension

  • the tables of annuity rates produced by the Government Actuary, on behalf of HM Revenue and Customs, which are used to work out the maximum income which may be withdrawn from unsecured pension funds and alternatively secured pension funds (income drawdown)

Pensions policy

The focus of GAD’s pensions policy team’s work is providing actuarial support to officials of the UK Department for Work and Pensions (DWP) on government policy in relation to work-based pension schemes.

The team has significant experience of working with officials in other government departments. Drawing on the team’s wide-ranging actuarial knowledge and experience, and their understanding of practical pensions issues, they are strongly-placed to give technical and analytical advice on pensions issues which recognises the broader policy context.

We have advised the Department for Work and Pensions on topics including:

  • the qualifying scheme requirements for auto-enrolment and scheme certification
  • aspects of The Code of Practice for Incentive Exercises to support DWP in its discussion with an industry working group
  • treatment of pension rights on divorce
  • structure and operation of the Financial Assistance Scheme
  • policy on contracting out of the state second pension and on the indexation of pensions after retirement

Contact us

To discuss your requirements, please email enquiries@gad.gov.uk or phone +44 (0)20 7211 2714.

Pensions regulation

GAD’s pensions policy and regulation team provides actuarial advice to the Pensions Regulator and the Pension Protection Fund in the UK. The Pensions Regulator is the regulatory body for work-based pension schemes in the UK. The Pension Protection Fund provides compensation to members of eligible defined benefit pension schemes, when there is a qualifying insolvency event in relation to the employer, and where there are insufficient assets in the pension scheme to cover the Pension Protection Fund level of compensation.

Examples of work undertaken include:

  • the development of appropriate methodologies to adapt defined benefit pension schemes’ actuarial valuation results to meet the Pension Protection Fund’s requirements

  • undertaking an independent review of the Pension Protection Fund’s annual actuarial valuation

  • assisting the Pensions Regulator to develop the actuarial aspects of its e-learning program for trustees

Contact us

To discuss your requirements, please email enquiries@gad.gov.uk or phone +44 (0)20 7211 2714.

Investment and risk

Early in 2009, GAD established a specialist Investment & Risk team. The team’s work includes advice on investment aspects of pensions and insurance as well as specialist projects on the management of risk within UK Government Departments and financial institutions.

GAD’s specialist team undertakes a wide variety of assignments for public sector bodies on issues such as investment strategy, risk modelling, and project risk management. Acknowledging and understanding the inherent uncertainty in future events is an essential part of any decision making.

Choice of an investment strategy

This is an important decision for all funded defined benefit pension schemes, defined contribution (including AVC) default funds and other organisations with investments. We will work with you to help set clear objectives and structure your investments to maximise the chance of meeting these.

Risk modelling and quantification

As well as the risks faced by traditional pension funds, GAD can help organisations to understand the unique risks that they may face. For example, GAD has advised the Board of the PPF on areas including long-term risk modelling, economic scenario generation and credit risk. We have also used stochastic modelling to compare outcomes for different collective defined contribution pension scheme designs and assisted with the wider use of such models within Government for policy-development purposes. Our guide to using models in decision making provides further discussion on how to get the most out of long-term financial modelling and discusses some of the issues in building and using models

Quality assurance and review

GAD can review your modelling approach and provide a valued external opinion. For example, GAD has provided assurance to the management of the Asset Protection Agency on the methodology and assumptions used to forecast losses and the approach to valuing the Asset Protection Scheme. (The Asset Protection Scheme is HM Treasury’s scheme to underwrite credit losses on some banks’ complex financial assets.)

Project and enterprise risk

GAD can provide assistance in measuring and quantifying the risks arising in a project or across an organisation. For example, GAD has been involved in the quantification of reputational risk for the Registers of Scotland and together with a working party from the government-wide risk improvement group, has produced a guide on risk analysis and management for projects (RAMP) for public sector bodies.

Investment and risk publications

GAD produces monthly newsletters summarising the latest market and economic news and providing a brief article on a topic of interest. Past editions of these can be found on our investment and risk updates section.

Contact us

To discuss your requirements, please email enquiries@gad.gov.uk or phone +44 (0)20 7211 2748

Actuarial Modelling

For nearly a century, GAD has provided actuarial modelling and analysis to the public sector, including governments and organisations in the UK and around the world. We have unrivalled experience and expertise in providing advice to these organisations on financial modelling, demographic modelling and other bespoke modelling services. A common theme to all these activities is the use of robust models to inform decision making which is discussed further in our guide to using models in decision making.

There are 3 service options that we can provide.

(1) Assurance

For your existing models, we can provide expert external assurance on your model quality assurance approach, the models themselves, or on specific aspects of the modelling. Typical terms of reference for assurance work are to review the modelling methodology, assumptions and use of data to:

  • assess the extent to which the existing approach is fit for purpose
  • provide comments on any limitations
  • make suggestions on additional analysis to better inform decision making

(2) Assistance / advice

If you would prefer to conduct your modelling internally but perhaps lack sufficient expertise or resources, we can offer advice and assistance on:

  • developing a modelling framework to help improve modelling activities and mitigate modelling risks
  • initial analysis and specification of new models to ensure that the resulting model will be suitable for the decisions that need to be made and can be implemented in a cost-effective way
  • parameters and data, where we can help select appropriate inputs and ensure the uncertainty and limitations of these is understood
  • supporting analysts developing, implementing, maintaining and refining models
  • understanding and communicating uncertainty
  • using models for decision making
  • communications and usability, where models are to be used by third parties

(3) Complete provision

We can provide you with a full modelling service. This can include initial consideration of model design right through to producing and interpreting results and making recommendations.

We can help you at any stage of the process and would be delighted to discuss your requirements with you.

Please get in touch with your usual GAD contact, email: enquiries@gad.gov.uk or call 020 7211 2710.

Her Majesty’s Treasury

GAD advises HM Treasury on a range of policy issues relating to the unfunded pensions schemes for public sector employees. These have included the costs of the schemes and also issues relating to re-organisation of staff.

Insurance

GAD provides actuarial advice to UK government departments and local authorities on life, general and health insurance related matters. We assist them in managing their own financial risks and also in developing government policy where this has actuarial or insurance implications.

Specific examples of the type of work that we do include:

  • finding solutions for risks that the private sector won’t insure, such as high impact low probability events
  • managing risks that are self-insured by government departments
  • valuing departments’ liabilities and pricing their insurance risks
  • reviewing departments’ compulsory insurance arrangements to ensure appropriate cover and value for money
  • understanding the wider welfare and economic impacts of government policies
  • providing quality assurance and peer review of actuarial work that departments have commissioned from external consultants

Contact us

To discuss your requirements, please email enquiries@gad.gov.uk or phone +44 (0)20 7211 2710

Social security

GAD advises the UK government, and a range of other countries and jurisdictions throughout the world, on their social security arrangements. We provide a comprehensive analysis of the long-term financial position of social security funds and their potential future development.

Social security arrangements often represent a significant proportion of public expenditure. Policy decisions can have major implications for future public expenditure for many years to come.

Demographic changes, and the increasing maturity of schemes, can lead to large changes in schemes’ financial positions over time.

Our analysis includes:

  • demographic projections, where suitable projections for a scheme are not available
  • cash flow projections of income expenditure including contribution income and benefit expenditure
  • advice on the financial implications of policy decisions, including changes to contribution rates, benefit levels, retirement ages, and other scheme conditions

UK social security

Since its formation in 1919, GAD has provided advice to the UK government on the National Insurance Fund as it has evolved from inception to its current position.

The significance of GAD’s role in the management of the National Insurance Fund is recognised in legislation by the requirement for regular reports to Parliament by the Government Actuary on the scheme’s financial position.

International social security

GAD’s expertise and experience is available to social security organisations throughout the world.

In recent years, we have advised a range of countries and jurisdictions on their social security arrangements, spanning Europe, Africa and the Middle East.

We advise on a range of financing methods, including pay-as-you-go (or unfunded) schemes, partially funded schemes, and fully funded schemes.

We provide a comprehensive analysis of a scheme’s financial position and its likely future development.

Example of the types of analysis that GAD can provide include:

  • providing demographic projections, where suitable projections for a scheme are not available, to assess the impact of factors such as increasing longevity
  • providing cash flow projections of income and expenditure, including contribution income and benefit expenditure in order to assess the scheme’s financial position and future contribution requirements
  • calculating, where appropriate ‘actuarial deficits’ of social security schemes, and advise on their implications and provide recommendations of how to deal with them
  • advising on the financial implications of policy decisions, including changes to contribution rates, benefit levels, retirement ages, and other qualifying conditions
  • advising on the terms and conditions for transferring between social security and other pension arrangements,

Contact us

To discuss your requirements, please email enquiries@gad.gov.uk or phone +44 (0)20 7211 2656

Staff transfers

Government policy is to provide some protection for public sector employees’ pension arrangements on a compulsory transfer of employment. We advise public sector organisations on such transfers of employment, and provide the certification of private sector organisations’ pension arrangements needed for public contracts.

GAD can help you by:

  • advising on pensions issues and procedures when staff are to be transferred to other organisations
  • advising on the detailed requirements for broad comparability, and provide the certification needed for public contracts
  • representing public sector organisations in negotiations regarding the terms under which members’ accrued pension rights will be transferred

How to commission GAD

These publications explain the commissioning process:

Contact us

To discuss your requirements, please email staff.transfers@gad.gov.uk or phone +44 (0)20 7211 2676 or +44 (0)20 7211 2752.

Further details on GAD’s services in this area can be found on the Staff transfers (Fair Deal) section

Overseas pensions and social security

GAD provides actuarial analysis to a number of overseas governments in relation to their national social security programmes and their local pension schemes for public sector employees.

Statistical analysis and premium bonds

Since 1970, GAD has been responsible for providing an independent check on the randomness of the monthly premium bond prize draw (ERNIE) output.

Statistical tests are carried out to check that the generation of bond numbers is free from bias and that each eligible bond has an equal chance of winning a prize.

We are not involved in premium bond administration and any queries relating to administration issues should be referred to the National Savings & Investments Helpline on 0500 007 007. Alternatively, if you would like to make a Freedom of Information Act 2000 request, please write to:

Freedom of Information Unit
National Savings and Investments
1 Drummond Gate
London
SW1V 2QX

email: foi@nsandi.com.

More information on making a request to NS&I is available on their website in the ‘About NS&I’ section.

National Savings and Investments provide a free tracing service to enable customers to be reunited with lost or forgotten savings and investments, including premium bonds. For more information see the Tracing Service page of the National Savings & Investments website.

We can also provide statistical analysis services to other public sector organisations.

Contact us

To discuss your requirements, please email enquiries@gad.gov.uk or phone +44 (0)20 7211 2635.

Healthcare financing

Ageing populations can lead to increasing healthcare costs.

Some of the drivers behind these increased costs are common to social security arrangements. Other factors will be unique to healthcare.

GAD offers a range of advice on healthcare schemes, including the projection of future costs, similar to those which would be carried out in respect of social security arrangements.

The demand for, and cost of, long term care is another area where GAD can provide helpful advice for policy makers.

Care and Support Funding Reform – a GAD technical bulletin

Contact us

To discuss your requirements, please email enquiries@gad.gov.uk or phone +44 (0)20 7211 2656.

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