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This study aims to examine whether and how the experience of specialized external governance mechanisms mandated by the Employee Retirement Income Security Act of 1974 – the actuary and auditor – affect pension plan funding.

This study uses data from annual pension plan regulatory reports (Form 5500), Form 10-K filings, Form DEF 14A filings (company proxy statements) and publicly available data sources. The hand-collected data include information related to the pension plan’s actuary and auditor and various pension plan data disclosed in the company’s financial statement footnotes.

The author finds that more experienced actuaries and auditors are associated with better funded pension plans, especially when the company has higher financial risk or lower board independence. Additional analyses indicate that companies with more experienced actuaries and pension plan auditors are more likely to make higher annual pension plan contributions and hold fewer Level 3 fair value assets.

The dearth of pension plan governance research generally focuses on whether and how internal governance mechanisms affect pension plan funding. To the best of the author’s knowledge, this is the first empirical study of the relationship between external pension plan governance mechanisms and pension plan funding.

As a result of the significant influence of actuaries on policy liabilities and the related earnings in the financial statements of a listed South African long‐term insurer, auditors encounter a number of key issues and considerations relating to the incorporation of actuarial expertise in the audit process. Guidance for auditors to address these issues and considerations is discussed in this study. The guidance was developed as a significant element of a wider research project, the objective of which was the development of a best practice framework for the formulation of overall audit strategies for insurance contracts and the related earnings of listed South African long‐term insurers.

Claims as property modelling and forecasting techniques have developed to take account of new investment theories, property researchers have tended to follow the approach of modern portfolio theory and, sometimes, the capital asset pricing model (CAPM). Argues that one of the reasons why property is often not included in actuarial property forecasting models for the purpose of asset allocation (which is a widespread perception in the property industry) is because actuaries have not made clear to property researchers the forms of their models, which are often quite different from those used in others parts of the finance literature. Explains how traditional investment theory can be adapted for actuarial use and how actuaries use forecasting models in asset allocation. Areas of property research which would assist actuaries develop better property forecasting models are identified.

The future prospects of pension funds in the private sector are linked inextricably with those of their sponsoring organisation. In the face of substantial economic and financial difficulties facing funds and the employers, with pressure from the trade union movement for greater accountability also mounting, alternative schemes such as Pay‐as‐you‐go (PAYG), are being more thoroughly considered. This system, widely used in the public sector, removes the necessity for complex administrative set‐ups and copes more effectively with the supplementation of pensions to allow for price inflation impact. However, it poses a significant financial burden on the employing organisation. “Book reserve” or “self‐investment” schemes allow members a motivating stake in the employing enterprise and allow the company to keep control of its cash and ensure worthwhile pensions.

The 1976 Race Relations Act received the Royal Assent on 22 November, 1976; but, at the time of going to Press, the Commencement Order (or Orders) visualised in Section 79(2) of the Act had not been issued by the Secretary of State. Nevertheless, we ask the reader to assume that the events referred to in the case study take place after the implementation dates of all the various provisions of the Act. The organisation referred to in the study as the ‘Composite Insurance Group Ltd is an entirely imaginary organisation, and the three individuals in the study, together with the comments attributed to them, are entirely fictional. Any resemblance to any real organisation, past or present, or to any real individual, is entirely coincidental.

Compensation for personal injury in Ireland is based on the principle that the wronged party should be restored to the position that he or she was in prior to the action of the other (restitution in integrum). Compensation must be in a single lump sum for both past and future loss, with no further redress even if losses subsequently arise that were unknown at the time of the trial.

Audits of long‐term insurers are complex, high‐risk engagements. The auditor’s consideration of materiality has a direct impact on the quality of such audits. So far, however, no research has been published on the application of materiality in audits of long‐term insurers. This study examines various aspects of planning materiality in the audits of listed South African long‐term insurers on the basis of responses to a questionnaire, taking into account issues identified from the literature reviewed. A number of recommendations are made on the basis of the findings. Largely on the basis of the results of this study, the South African Institute of Chartered Accountants has commissioned a project to revise existing guidance for auditors.

When Equitable Life went to court in a case concerning the bonus rates it applied to pension policies with guaranteed annuity options, it emphasised that its rules gave it wide discretion in its bonus decisions, an argument that was unsuccessful. This paper considers the constraints on the discretion available to life insurers in the way they determine bonuses on with‐profits policies. It reviews four previous court cases concerning withprofits policies: in one of these, the insurer lost. The Financial Services Authority has now taken on board the need for life insurers to describe their bonus practices far more fully. That will help lead to a more precisely defined contract between policyholders and insurers. It is also proposing new rules, which should reduce the potential for discretion to be abused. The paper also considers the actuarial profession, whose members have the responsibility of making recommendations to life insurers about bonuses. It suggests there may be benefit if the profession can go beyond the limited guidance on bonuses it has issued, to develop and publish best practice in the bonus declaration process.

The 2013 collapse of the Rana Plaza factory building in Dhaka, Bangladesh, was the most deadly disaster in garment manufacturing history, with at least 1,134 people killed and hundreds injured. In 2015, injured workers and the families of those killed received compensation from global apparel brands through a US$30 million voluntary initiative known as the Rana Plaza Arrangement. Overseen by the International Labour Organization (ILO), the Rana Plaza Arrangement awarded payments to survivors using a pricing formula developed by a diverse team of ‘stakeholders’ that included labour groups, multinational apparel companies, representatives of the Bangladesh government and local employers, and ILO actuaries. This paper draws from anthropological scholarship on the ‘just price’ to explore how a formula for pricing death and injury became both the means and form of a fragile political settlement in the wake of a shocking and widely publicised industrial disaster. By unpacking the complicated ‘ethics of a formula’ (Ballestero, 2015), I demonstrate how the project of creating a just price involves not two sets of values (ethical and financial) but rather multiple, competing values. This paper argues for recognition of the persistence and power of these competing values, showing how they variously strengthen and undermine the claim that justice was served by the Rana Plaza Arrangement. This analysis reveals the deficiencies of counterposing ‘morality’ and ‘economy’ in the study of price by reflecting upon all elements of price as situated within political economy and history.

This paper explores the background to the work of the Accounting Standards Committee in attempting to formulate an accounting standard on pension costs for the United Kingdom. Taking into account fundamental accounting concepts and typical actuarial practice, suggestions are made for a practical system of treatment and disclosure of pension costs in the employer's accounts.