Looking into the future makes financial sense

13th June 2003 at 01:00
Ross Davies visits an actuary who has some sage advice for teachers

Actuaries style themselves as "the people who make financial sense of the future". They calculate the odds of this or that happening, and the financial consequences for their clients, often large insurance companies.

It is work that makes them much in demand, with salaries of pound;70,000 commonplace, and plenty of jobs advertised at around pound;120,000 a year or more.

Richard Purdue, 54, is an actuary with the Aon Consulting Group, where he is responsible for advising the trustees of pension funds covering 5,000 pensioners and employees in everything from tiny, family firms to household-name international concerns.

He credits FE with "raising my game, getting me to adjust my sights, and enabling me to do something that I otherwise would not have done".

Mr Purdue, whose late father ran a scrap metal business, left Luton grammar school at 18 with two C grade A-levels in pure and applied maths, "not enough to get me into a redbrick university". All he knew was that he liked maths, and he also liked the sound of a newish course offered by the then Enfield College of Technology. "It was business mathematics, which offered a practical approach to maths, and though I didn't know it at the time, covered a number of the subject areas in which actuaries have to be trained including statistics, econometrics, economics and numerical method," he says.

"We also studied operations research, and for my year in industry I was sent to the operations research department at Strand Hotels. I still didn't know what I wanted to do, but my boss at Strand suggested I check out actuarial work, so I did. I thought 'I could do this', so I got a job with an insurance company, and enrolled as a student with the institute of actuaries."

These days, most people enter the profession via an actuarial or other maths-related degree. Mr Purdue secured exemption from some parts of the institute's rigorous course, qualified, and is now established in this exclusive profession. "The money is good, but that alone isn't the reason I went for it," he says. "You don't know what hard work is before you sign up for the IoA qualification course, and the work itself is demanding in time, energy and constant challenges."

Contemporary challenges include dealing with the effects of the fall in the stock market, in which pension funds invest, as well as the constant introduction of new legislation. Richard Purdue, however, insists: "You do feel you're helping people.

"Actuaries like myself work for the trustees of the pensions funds and for the companies who pay into them; we advise on whether there's enough in the fund to meet commitments, and if not, what to do about it. And while we're not in direct contact with a scheme's pensioners and members, we are helping to provide them with the best possible pension in the most efficient way."

An actuary in Mr Purdue's line of work has to "make sense of the future", whether he or she likes that future or not. Few are happy about pensions these days, other than fat cats in business and politics: so what is his advice to FE teachers and administrators?

Mr Purdue, whose wife Susan teaches at Silsoe lower school, Bedfordshire, says: "My advice is that if you're in the Teachers' Superannuation Scheme, stay in it and consider making some additional payments - not so much that you can't live now, but enough to make sure you have as comfortable a retirement as possible. We're all living longer, and with pension fund assets not being worth what they were, pensions are becoming more expensive to provide."

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