Chief executive officer of the Actuaries Institute, Melinda Howes, spoke to Amal Awad about how actuaries contribute to the superannuation industry.
Being a woman in a powerful role with a family, how do you find a work/life balance?
I didn’t think about this when I started my career, but working as an actuary is a fantastic job for anyone who has to combine family and work responsibilities. [When] I had very little kids and I was pretty much housebound with them, I was able to do a quite technical role that involved me just doing the work from home and emailing it back in. About a third of new actuaries coming through now are women, so we have a very strong success rate of women in the profession. I think our first female actuary qualified in the late 1970s, so it is fairly recent for women to be in the profession. But every year there is a higher proportion of women. Overall, a quarter of our members are women.
Do people have expectations of what an actuary looks like?
Most actuaries have had this experience, that whenever they tell someone they’re an actuary, the reaction is either “you’re not like I expected an actuary to be” or “you don’t look like other actuaries”, but this other actuary is a mythical creature that doesn’t exist. Our members are predominantly young; our most common age group is 25 to 35 in our membership. And they have very broad business skills and they’re articulate, intelligent, great problem solvers. So the typical image of an actuary as a backroom, cardigan-wearing number cruncher is a long way from the truth.
Do you think it matters and would you like to change this perception?
Yes, it does matter. And the interesting thing – we’ve done research on this – is that people who have worked with actuaries have a very different view of us to people who haven’t worked with actuaries.
How do you see the role of actuaries in super funds?
Actuaries are involved in a number of different industries, and superannuation is one of the key ones. We’ve got around 20 per cent of our members that work in superannuation, and in the past, actuaries worked mostly in defined benefit super. These days we work right across the whole range of super funds. So we do a lot of work in defined contribution, product design, those sorts of areas. But increasingly actuaries are involved in advisory boards on strategic issues. There’s a lot more emphasis from APRA on risk management, and actuaries help super funds identify their enterprise-level risks and work out how to address those, so that’s a real area of specialty for us.
Are you seeing more super funds approach actuaries for services in enterprise risk management?
More funds are starting to work with actuaries on that sort of broader business-type advice. And also, operational risk is another focus area for super funds at the moment. I think when defined contribution funds got religion on what value an actuary can add was with some of [the] liquidity problems that funds had during the global financial crisis.
What does 2013 hold for actuaries working with super funds?
I think [super funds] are facing a bit of a demographic time bomb at the moment. As a nation we are ageing and we are starting to move from the accumulation phase to the retirement phase. So the baby boomers have already started to retire. And, depending on the age structure of the fund, somewhere in the next 15 years the weight of numbers in these funds will flip over and the weight of money will flip over from the accumulation phase to the retirement phase. That has all sorts of implications…
What are you going to do when you retire?
Well, I won’t be retiring probably until my 70s, because we’re going to live to 120 and I’ll be bored, I reckon, if I retire in my 60s. I’ll be thoroughly bored. I’d like to travel and I’d like to stay involved, I think, in some sort of intellectual capacity. And hopefully I will have got the kids out