This website is entirely my own creation and has nothing to do with any former employers. Not only do I accept all responsibility but also I assert all rights over the site's content. The views expressed are entirely personal and not endorsed by the UK actuarial profession, at least not yet, and my work has not been peer reviewed. Thanks are due to those who have discussed the issues… and to those who have refused to engage. Family and friends have been supportive, for which I remain grateful.

In the past, I have refrained from criticising either scheme actuaries or the pension regulator, suggesting that the problem is just the framework within which they are forced to operate. However, I now believe that, together, the pension regulator and the actuaries are responsible for presiding over, and having invented, a morass of regulations which don’t work. One of the factors that changed my mind was the manner in which the LDI debacle was greeted, as if there was no problem.

Some pages may appear repetitive but I don't know which route you'll take. Several pages have little content - deliberately. Although I have removed the symbol, all amounts are in sterling. Nothing on this website constitutes “advice”.

Although this website has a lot in common with “discrate”, this one is more complex.  There, I have been trying to explain why the discount process simply doesn’t work for long-term financial entities, even for really simple contracts. Here, I am trying to deal with defined benefit pensions. My basic question is why we think we can get complex stuff right if we can't get the basics correct - which I regret I rather doubt. We need much more balance between short term and long term views.

Typically, any financial entity's assets and liabilities are periodic cashflows over time, short or long; capital values are only poor representations of those cashflows. Consistency between future cashflows in both directions should be sought. However convenient it may have been in the past to represent them by scalar values, that approach conceals far more than is revealed. Given the enormous computing power now readily available, there is no good reason to retain scalars instead of using stochastic projections, so allowing stakeholders a more direct choice of risk appetite.

However, as scalars are still required by the regulators, at least in UK DB pension space, this website starts by considering how to derive “discount rates” as sensibly as we can. We will need to deal with some terminology and background. We can then move on to the contracts considered, the other variables taken into account and pricing approaches, following which we can look at outcomes, mostly shown as dynamic  charts (now all in HTML5 rather than in Flash).

Ultimately, I am driven to the conclusion that actuaries should stop using discount rates alone for long-term projects with specified intended outcomes because cashflows are the key elements and scalars alone are inappropriate. A further point is that a variable may sometimes be negative, even if the mean is positive (see example). While I’m sure that is well known, I’m not convinced it’s always taken into account.

Indeed, if we can't even do simple stuff, can we really solve complex problems?


Jon  19 Jun 2026