Writing a blog means coming up with things to talk about. I'm the first to acknowledge that we actuaries tend to get excited about things that may make a lot of people's eyes glaze over (new mortality table!), so I don't underestimate the challenge of finding a topic. However, for this post, I admit to being inspired by KPMG's Summer Splash program. In 2022, Summer Splash means that every weekend is a long weekend during July and August. Yup, that's an extra seven paid days of vacation for all employees!
Summer Splash is a wonderful employee benefit, and one of my fellow partners in the Life and Pension Actuarial Practice, Greg Winston, practices in pensions and employee benefits. Greg agreed to be my very first blog interview. We traded stories of how we came to the profession and the types of work we do. I was pretty surprised to learn that, although there are differences in where we grew up, how we came to the actuarial profession and how we work, there are quite a few similarities, too.
Both Greg and I were math nerds in high school and found out about the actuarial profession through school (I met an actuary at a careers fair and Greg credits his grade 10 math teacher). We both attended university on scholarships and worked at life insurance companies during our university days. However, while I fell in love with life insurance, Greg was not similarly inspired. Instead, he began to appreciate that there were a lot of seniors around who struggle financially due to inadequate retirement income. Inspired to make a difference in their lives, he chose to focus on pensions, expanding into employee benefits.
Like life insurance practitioners, Greg's team provides specialist support to financial statement audits as well as deal advisory due diligence engagements. However, a key difference is that rather than dealing with one industry, his team deals with a wide range of industries—any time significant pension or non-pension employee obligations and post-retirement benefits are involved. These can have a material impact on the company's financials and buyers should carefully consider them when assessing the price of a transaction. Greg's team also performs traditional actuarial pension consulting work as well as compensation design. I had to ask: What do actuaries bring to the table when the subject is compensation design?
"Actuaries have a holistic view of compensation and total rewards," Greg told me. "In addition to the softer issues, we have the skillset to quantify the financial implications of current and deferred compensation. Our insights can build credibility with key stakeholders such as finance departments and employee unions."
Greg also shared his views on the future of the actuaries' role in pensions. Surely, I asked, with the decline of defined benefit pension plans, there will be less role for actuaries? "Don't count us out just yet," he says. "The need for companies to pay employees and attract/retain them hasn't gone away. Defined contribution plans are relatively new and it will be interesting to see how the outcomes on retirement emerge compare to defined benefit plans. There are already moves towards hybrid plans, such as target benefit plans (TBPs), that blend elements of defined benefit and defined contribution plans. These need pension actuaries to lead the way in navigating clients though the legislative framework, funding policies, and accounting treatment."
There's nothing quite like talking shop with a trusted colleague and coming away with a wider perspective on a shared discipline!
Greg and I concluded our chat with a very important topic: What are you planning to do with your KPMG Summer Splash days? We are both looking forward to spending some time outside in Toronto's parks and on patios. I'm also planning to take advantage of more time to indulge in my favourite hobbies: knitting and sewing. Greg also intends to work around the house, but on some DIY projects. Once again, we are similar but different!