Pensions & inflation - Is it sensible to put money in pension schemes?

The intention of this paper is to give a simple and, it is hoped, instructive picture of the devastating effects of inflation. The effect of inflation on individual annuities is especially severe, as there is no third party who is able to compensate the owner of the annuity. Another purpose is to focus attention on the fact that life insurance is dealing with people’s money – pounds & pennies – crowns & oeres – and that the actuarial science is our tool to enable us to serve our policyholders, clients & owners. When the environment in which we are working prevents us from fulfilling our task we should not just observe the facts and then either say ‘sorry’ or keep quiet. We have the duty to publicise the evils and point out how we are hindered from executing the economic services we are supposed to render the citizens of our society. This paper was originally presented at the 24. Actuarial Congress in Montreal.

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