Page 85 - Group Insurance and Retirement Benefit IC 83 E- Book

Some attempt at least is made to create real assets to back the liabilities of properly
funded or insured schemes. In schemes with deficient funds—i.e. in nearly all final salary

schemes—only a half-hearted attempt is made. An unfunded scheme for pensions based
on final salaries is but a way of raiding the savings of other people. For this reason I

consider such schemes to be wholly objectionable.
The argument is simplified—an outline only—but it should prevail, being derived from

economic principles, not from administrative convenience. Our forefathers, the early

actuaries, were at pains to abolish the assessment Life Offices; we have so far lost touch
with the principles of our craft that we condone, and now even encourage, assessment

pension schemes.