Information Matrix

When I read Allan Martin's earlier blog on how pension-scheme reserves routinely fail to include expenses, I was so surprised I had to ask him if it was really true.  As a former life-insurance actuary, any reserve which didn't include an allowance for expenses simply wasn't a complete assessment of the liability in my view. 

In his book Unseen Revolution, Peter Drucker drew attention to the structural changes in economic ownership which were silently ushered in with the growth of corporate pension schemes.

In an earlier posting we looked at several examples where a pension scheme dominates the picture of the company's finances and value.

Last week we looked at the odd situation whereby longevity risk is regulated more strictly in an insurance-company annuity portfolio than in a company pension scheme.  One argument for the different treatment is that the sponsoring employer is a source of ongoing financial support for the scheme.