Select Committee on Treasury Appendices to the Minutes of Evidence


Memorandum from the Institution of Professionals, Managers and Specialists, Government Actuary's Department


  IPMS represents all grades in GAD. When pay and grading was devolved to departments in 1996, it was agreed that the members of other civil service unions would join IPMS, under the concordat agreements between Trade Unions, so that one union existed for representation of staff in negotiations with management. The Branch is the only union officially recognised by management in GAD. Management involves the union in all decisions that directly affect staff pay and conditions and also consults on wider issues.


  The department exists "to provide mainly public sector clients with independent, professional actuarial advice of the highest quality at reasonable cost". The work carried out includes:

    —  various statutory tasks required to be conducted by the Government Actuary under legislation;

    —  acting as actuaries to UK public sector pension schemes;

    —  assessing whether private sector schemes to which Civil Servants are transferred (eg following privatisation) are broadly comparable with the Principal Civil Service Pension Scheme (PCSPS), this role also applies to transfers from other parts of the public sector;

    —  providing financial estimates on the UK National Insurance fund;

    —  provision of actuarial advice to policy makers on pensions and social security;

    —  producing the national population projections;

    —  provision of actuarial advice to the Financial Services Authority (FSA) on the UK insurance industry; staff carrying out this work will move to the FSA from April 2001;

    —  advice to overseas governments on social security, public sector pensions and supervision and regulation of their insurance industry;


  The following are issues that we would want to highlight to the Sub-committee.

Independence and status

  GAD fiercely values its independence. Although high levels of professional standards bind actuaries, the voice of actuarial advice is clearly easier to hear when it comes from a separate department, rather than coming from a section within a department. The department has a high status within the actuarial profession. The department also provides independence from private sector forces when giving advice. Outside actuarial firms would have the considerations of their other clients to balance with advice on policy. It is important that the department continues not just to give policy advice to central government but also carries out practical actuarial work, for example, as actuaries to government pension schemes and work for overseas clients, as this helps ensure that advice is of the highest quality by grounding it in real and broad experience. Without a centralised department our clients would either have to employ small actuarial departments themselves, purchase advice from actuarial departments set up within other government departments or purchase the services of private sector actuaries. There would be a lower level of overall actuarial knowledge within central government, advice obtained would be less likely to be consistent and there would be less opportunity for the cross fertilisation of ideas.

  IPMS, the Council of Civil Service Unions and their members value very highly GAD's role in assessing whether private sector schemes to which Civil Servants are transferred (eg following privatisation) are broadly comparable with PCSPS. In this regard GAD is valued especially because it is independent; has special knowledge of PCSPS; and also has general actuarial expertise. Advice from GAD is therefore trusted to a much higher degree than if it was contracted in from elsewhere. We understand that it is the Government's intention to extend TUPE (Transfers of Undertakings Protection of Employment regulations) to cover pensions benefits (these are not currently covered by TUPE). This will make it doubly important that GAD is able to provide this service.

Actuarial staff

  To continue to attract and develop high quality entrants, the department needs to maintain a good range of actuarial work. Because the department centralises actuarial expertise in government we are able to hold a major recruitment exercise each year to recruit a number of high calibre graduates. Although work on supervision of the United Kingdom Insurance Industry is shortly to transfer over to the FSA, GAD will continue to retain an interest in this area with overseas work. While GAD continues to have responsibility for its current broad range of work the Department will be able to continue to attract high calibre graduates. It is difficult to see how a steady flow of qualifying actuaries could be maintained if actuaries were not contained in one body. Also, without a centralised department, career paths would be much more limited or non-existent. In order to pass the Actuarial exams a broad range of subjects need to be covered. Within a single department trainees have an opportunity for practical experience in different areas of actuarial work as well as receiving provision of coherent and consistent study leave and provision of mentorship and support from qualified actuaries. Students are also more easily able to support each other through the rigours of the qualification process.

  Actuaries are one of the highest paid professions. At the current level of salaries paid the department therefore provides good value for money to the country. There is very much a public service ethos at all levels, but especially so at senior staff level. Many of our staff could command higher salaries in the private sector but the environment of the department provides an additional incentive to remain in public sector work.

  With a centralised actuarial department loans or secondments to other departments and bodies can take place, thus helping out other public sector services who would not necessarily want to recruit their own actuaries/trainee actuaries.

Other professional staff

  As a small department with around three-fifths of the staff either being trainee or qualified actuaries, the lack of opportunities for non-actuarial staff has been an ongoing concern of the staff side. A number of recent developments have helped ameliorate this concern to some extent. The attainment of Investors in People status has highlighted the need for training and development of non-actuarial staff. The department has begun actively helping some staff to obtain higher educational or vocational qualifications. The system of pay and grading has been overhauled, allowing those who have developed both themselves and their role to be rewarded with promotion within their post. Vacancies in other departments are notified to staff. With the growth of the department in the last 10 years more staff have been recruited from outside the department, both from within the public sector and from outside organisations. There is still scope for more to be done to map rewarding career paths for non-actuarial staff.

Implications following the move of staff to FSA

  Although there has been some concern about the future of the Department following the transfer of staff to FSA, the department will still be of a similar size, in staff numbers, as it was two years ago. The move to New King's Beam House has not only provided a better, more modern, working environment, but also substantially reduced the property costs. As long as there is a commitment by Government to keep a department dedicated to providing independent and impartial actuarial advice, the department should have a bright future.


  The IPMS staff side strongly supports the maintenance of the Government Actuary's Department as an independent and separate department within central government. Such a department is essential for the maintenance of reasonably priced, experienced and independent actuarial advice. It is also essential for the development of those who will be able to give such advice in the future, through its commitment to actuarial training.

15 January 2001

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