Trijot Singh is currently working as Senior Actuarial Analyst and has a work experience of about 3.0 years in pensions. During our discussion, he shared his thoughts on role of an actuary in pension industry, below is an edited excerpt of the same.
Q. What role does an actuary play in a consulting firm for pensions?
Actuary in consulting business advise companies or corporates which have the obligation to pay pensions to their employees in future, regarding the uncertainties (change in liabilities, change in value of assets due to change in economy etc) which can affect their pension liabilities. Derivation of pension liabilities – for this we estimate pension of all the employees in our client’s company using the concepts of pensions as mentioned in CT5. This estimated value is the pension liability that the client company has to pay in future. In order to pay that liability company has to keep some assets with them in form of equities, bonds, property, cash etc. It is very common practice for Pension Scheme to invest the funds in equities for Actives and Defferds, and for pensioners – one who are receiving pension, the asset class is fixed interest securities for safe and stable returns. We suggest
the future course of action to our clients by analyzing the uncertainty in value of their assets and liabilities. In this way, we help maintaining the solvency of our client’s company.
Q. Today pension industry in India is…
Today pension Industry in India is facing challenges, as pension is an obligation and not a choice for a company to pay to the employee when they retire. The pension industry is now augmenting by offering Defined Contribution Pension Plans as compared to Defined Benefit Pension Plans.
Q. From the Last answer we wish to know more about the DC and DB Pension Plans?
Defined Benefit plans in a layman language are the one in which benefit is defined and company providing Pension plans have the obligation to pay, whereas Defined Contribution plans are the one in which Contribution of the members are defined, they are invested in the stock market as per the fund decided by potential pensioner. So Pension amount depends upon how the Stock market changes, so the pension amount is not guaranteed.
Q. What skills help one to progress in their career?
The most important skill is Diplomacy i.e. act of dealing with people, that’s the key part as we deal with the problems as teams and not individually (Being a Team player is the most important part). I would also like to mention importance of pragmatic approach. If a person is cramming and clearing papers but unable to understand the core concepts than it would be harder for him to survive. Clearing exams is a must so as getting job specific skills, and the most important skill to manage work and studies.
Q. How was your experience in UK as a trainee? How is the work culture different from India?
UK is the country for which we work, everyone feels good when they meet the counterpart for whom one is working.The most amazing part for me was to find person just by my age is an Actuary. This thing motivated me to complete my remaining papers as soon as possible. Work culture is same everywhere, you have to meet deadlines, do your studies along with office (As you are doing actuaries).