Nausicaa Delfas’ speech at the Association of Consulting Actuaries’ 75th anniversary Chair’s dinner
Summary
Actuarial judgement is essential to delivering TPR’s mission of building a pensions system that provides sustainable retirement income.
Actuaries:
- strengthen defined benefit (DB) schemes, guiding long‑term strategy, risk management and sustainable outcomes
- improve defined contribution (DC) outcomes, designing value‑for‑money approaches, investment strategies and decumulation pathways
- enable effective collective defined contribution (CDC), ensuring fair risk‑sharing, robust modelling and strong governance across generations
- bring rigour, independence and long‑term thinking, qualities that make them indispensable to trustworthy, future‑focused pensions decision‑making
Thank you for that kind introduction.
On such an important anniversary you will forgive me on this occasion for celebrating the role of actuaries and their role in the future in my remarks.
The continuing need for actuarial judgement
Since the ACA began in 1951, a lot has changed.
Average life expectancy in the UK was then around 68 or 69.
Retirement planning was, by today’s standards, refreshingly straightforward.
You saved, you retired – and then, actuarially speaking – things tended to resolve themselves quite quickly.
75 years on, people are living well into their 80s, and sometimes beyond.
In that time, pensions have gone from a technical back-office function to a social good that is central to financial wellbeing, fairness, and long-term economic growth.
But throughout, one thing has remained constant: the value of actuarial judgement.
You are strategic advisers, system designers, and trusted guides.
Thanks to you, schemes, employers and members make decisions that will shape outcomes decades into the future.
Before I talk about the future, a celebration anniversary such as today has made me reflect on my three years at TPR.
In my first speech, seven weeks in, I called out what I saw as ‘the pensions challenge.’
Over the last decade we have rightly celebrated the success of automatic enrolment (AE). Millions more people are saving for retirement, and that is a real achievement.
But saving, on its own, is not the same thing as security.
Too many people are still on a path to outcomes that fall short – not because they have done the wrong thing, but because the system around them has not yet caught up with the scale of the challenge.
And for many, it has not been clear what to do when they come to retire, often losing value at that point.
Which is why I have called our current pensions system “unfinished business”.
During the last three years a lot has been happening on the pensions policy agenda.
Two complementary reviews (investment and adequacy) along with the Pensions Scheme Bill. In DC, these are driving consolidation, enabling structural change, strengthening value for money requirements, introducing guided retirement and CDC.
And in DB, provisions for superfunds and greater clarity around endgame options.
We have been busy during this period at TPR as well.
We have made real and tangible progress moving from diagnosing the challenges in pensions to actively reshaping how the system responds to them.
We have been clear about the standards we expect, and where schemes cannot meet those standards, consolidation and exit are now part of the mainstream conversation rather than the exception.
As a regulator, we have become more market‑facing, more data‑led, moving from a compliance to a risk-based approach focusing on market outcomes, and expert to expert engagement with you.
All this progress matters because it shows that change is possible – and it gives us the confidence that, together, we can now finish the job we started.
As I reflect on this period, I am heartened that although those in industry may disagree from time to time on specific issues, they are united with a sense of purpose to make the pension system work better.
Three years and four pensions ministers later, that brings me back to today and to what all of us can do to make the system better in the future.
I’ve set out a mission for us as a regulator, and us all as a sector:
To make sure the pensions system provides a sustainable income in retirement for generations of people now and in the future.
And as we work towards that, your role is crucial.
Our mission to raise governance standards means ensuring the sector has the skills it needs to make sure decisions serve the best interests of members.
I know that that is important to you as well when thinking about the future of your sector.
I am now going to run through how I think the role that actuaries play, and will continue to play, is really important across the pensions market, whether that’s DB, DC, or CDC.
The evolving role of DB
Let me start with defined benefit schemes.
For many years, the conversation has centred on the shift towards endgame and the end of an era.
But today, the conversation is more nuanced, and more hopeful.
DB schemes are better funded than at any point in recent memory. Sponsors and trustees are actively considering endgame strategies: buyout, consolidation via superfunds, run‑on, or long-term low dependency.
Your advice is critical in helping schemes move from recovery to sustainability, balancing member security with sponsor affordability.
The focus is shifting from short-term funding cycles to long-term journey planning – and that requires deep expertise in covenant, investment strategy, and risk management.
There is also an important opportunity in running schemes on well, where appropriate – delivering better outcomes for members while releasing capital for productive investment in the wider economy.
You are uniquely placed to support this evolution.
We need trustees to be able to ask the right questions, stress‑test assumptions, and make informed decisions in an increasingly sophisticated environment – and they are going to need your expertise and advice to do that.
DC: From accumulation to outcomes
If DB is about maturity, DC is about scale and impact.
DC now represents the retirement future for millions. Automatic enrolment has transformed participation – but that is not enough.
Fulfilling our mission to make sure people have a sustainable income in retirement relies on your skills.
As the DC landscape matures, bringing greater emphasis onto retirement outcomes and products – particularly with the introduction of the guided retirement duty – there will be new opportunities for actuaries to have a greater role in this space than they have in the past.
We need to move beyond a narrow focus on charges and accumulation, towards a broader consideration of value for money that incorporates investment performance, costs and charges, and quality of service.
Getting the best outcomes for members means helping trustees think more widely about how schemes might be designed.
It might mean thinking about how systemic risk might impact how they draw down their pensions, and how that evolves over time.
And about the likely future mortality rate of cohorts likely to retire with mainly DC pots.
There are real opportunities for actuaries to shape:
- investment strategies that support growth, including productive finance and illiquids
- decumulation pathways that help members turn savings into income with confidence
- governance frameworks that ensure schemes are well run, resilient and member-focused
All this relies on trustees who are highly-skilled and able to exercise great judgement, and your perspective and advice will be essential to achieving that.
They will continue to need your long-term, evidence-based perspective.
They will need advice based on an understanding of uncertainty, trade-offs, and how decisions made today affect outcomes decades away.
As DC becomes more complex and more consequential, the need for clear, objective, actuarial insight will only grow.
CDC: Designing the future
Then there is collective defined contribution (CDC) – perhaps the most exciting development of all.
CDC challenges the idea that pension provision must sit at one of two poles: full individual risk in DC, or full employer guarantee in DB.
Instead, it offers a collective, risk‑sharing model that has the potential to deliver better, more stable outcomes for members.
But CDC will only succeed if it is designed, governed and communicated well.
And that is where you come in.
CDC relies on sophisticated modelling, prudent assumptions, transparent adjustment mechanisms and strong governance. It requires careful balancing of fairness between generations, clarity about risk-sharing, and ongoing monitoring.
More broadly, CDC invites the profession to engage in system design, not just scheme design.
It is an opportunity for you to help shape a new chapter in UK pensions.
Conclusion
So here are a few clear asks for how you can contribute to our mission.
First, keep putting long‑term outcomes first – even when the short term is noisy, political, or uncomfortable.
Whether in DB endgame decisions, DC value assessments, or CDC design, your ability to look beyond the next valuation cycle is invaluable.
Second, help us raise standards in the sector.
We need ambition on standards in how DB schemes are managed, in what DC can deliver for members, and in how CDC can reshape the retirement landscape.
Your advice sets the boundaries of what others believe is possible.
And finally, your rigour and independence of mind means that in a changing landscape, your voice matters more than ever – not just in technical discussions, but in shaping the direction of the system as a whole.
So as we celebrate this anniversary, I want to celebrate your contribution and affirm how much we still need it across the sector.
In recognition of that, please be upstanding for the toast.
It is my pleasure to propose a toast... “...to the Association.”
