Ch1: Actuarial advice

Question 1

Trustees of benefits schemes may require advice on: (3)

Answer 1

• Managing the assets of the scheme
• Paying benefits promised as they fall due
• Maintaining solvency

Question 2

Sponsors of benefit schemes may require advice on: (4)

Answer 2

• Providing protection benefits that meets the needs of the members and their dependants
• Providing retirement benefits that meets the needs of the members
• Managing cost of providing the benefits
• Meeting legislative requirements

Question 3

Government may require advice on: (4)

Answer 3

• Setting legislation that impacts the provision of financial products, schemes contracts and transactions that provide benefits on future financial events
• Monitoring adherence to regulation
• Funding benefit provision by the state
• Monitoring the funding of benefit provision by the state

Question 4

Types of advice

Answer 4

• Indicative advice - giving opinion without fully investigating the issues (such as response to oral question)
• Factual advice - Based on research of facts
• Recommendations - Researched and modelled forecasts, alternatives weighted, recommendations made consistent with requirements, work normally peer-reviewed

Question 5

When giving advice disclose:

Answer 5

• Assumptions made - should be relevant for circumstances of the client
• Explain to client reasoning of assumptions made
• Explain implications of making alternative assumptions and solutions not chosen