Longer life expectancy and declining birth rates are making it harder for public authorities to sustain pension systems, especially given the fragile state of public finances. To see the situation more clearly, UCL researchers created a chair for the study of legal issues relative to the actuarial aspects of pensions.
Ensuring the viability of pension regimes has become a major social challenge. To meet it, policies must be based on accurate information and forecasting and prescient anticipation. Statistical institutes and economic forecast bureaus attempt to provide this, but the recently created UCL Pensions Chair intends to dig deeper. ‘The idea for the chair was born of my meeting Pierre Devolder of UCL’s Institute of Statistics, Biostatistics and Actuarial Sciences’, explains Alexia Autenne, a UCL doctor of law specialised in economic and business law.
The limitations of specialists
Dr Pierre Devolder participated in the Belgian Pension Reform Commission established by Ministers De Croo and Laruelle in 2013. Its goal was to devise a viable system covering 2020 to 2040. ‘He has extensive experience in the actuarial field. As for me, my background is in business law, in which I’ve conducted research on pension funds. So I bring a legal perspective to the retirement funding longevity issue.’
Dr Autenne proceeded from an observation: pension research is full of obstacles owing to specialists’ limitations. ‘Jurists are confronted by incertitude over long-term financing while researchers need clear legal information to make forecasts.’ It’s this obstacle that she and Dr Devolder wanted to overcome.
Combining experience
‘Pierre Devolder and I created a chair because we thought the combination of our experience in our respective fields could spur original thinking, introduce a fresh, broader perspective and contrasting views. We thought it was important on an intellectual level to introduce a new dynamic in future pension financing research that combined “the figures” and regulatory aspects’. The UCL Pensions Chair was inaugurated in 2014, thanks to a bequest from Pierre De Merre intended for various university projects. ‘The funding must not be linked to a brand,’ Dr Autenne emphasises, ‘to, say, an insurance company or pension fund, because we’re dealing with a delicate subject’. The chair was established after months of research on how to structure and build the project, plan future work, establish funding contacts. ‘Our goal was to hire researchers, and thanks to the Fondation Louvain we were able to hire two senior researchers and an administrative assistant. We’re looking for other funding sources to sustain it.’
Why a chair?
But why create a chair instead of some other entity? ‘It’s because the funding method is closely linked to Fondation Louvain’, Dr Autenne explained. ‘If we created a research centre or institute, we’d have to institutionalise it. That would have been complicated and premature. We wanted first and foremost to create a meeting place for specialists in two fields, with more flexible operating methods and funding. But it’s a first step.’
Objective: excellence
The UCL Pensions Chair has three objectives, the first scientific: in a framework of transdisciplinary excellence, generating fundamental research on retirement funding in Belgium and Europe. Second, teaching pension-related subjects in terms of both figures (statistics, forecasts) and law. The two chairholders established a ‘pensions certificate’ programme intended for university students and experienced practitioners. Registration is based on a dossier submitted by 1 February 2016.
‘These are new courses and a first in Belgium’, Dr Autenne points out. ‘KULeuven also offers a certificate but only for strictly legal aspects. We, however, are going to critically examine both regulatory and financial information regarding pensions, which is an evolving field’.
The third and final objective is making contacts with civil society. ‘We want this chair to be a place for reflection through a free monthly seminar series called “Pension Fridays”, featuring speakers invited from the two worlds we’re studying.’
Political adviser?
This initiative could be useful to politicians appointed to choose pension financing arrangements and ensure the system’s sustainability. ‘But we’re not trying to be consultants to public authorities.’ Dr Autenne insists. ‘While we’ll keep the political world’s concerns in mind, we’ll also keep our distance. We won’t be slaves to the latest news, we’ll guard our independence from governments, employers, unions, insurance companies, etc. Our outlook will be purely scientific and rigorous. Those involved in these issues can ask us to make proposals, address research topics, but we’ll do so with complete independence.’
The chair is also part of the expertise that UCL hopes to develop and share in the framework of the Louvain4Ageing ageing research project.
Carine Maillard
A Glance at Alexia Autenne's bio
A Glance at Pierre Devolder's bio
Pierre Devolder earned his bachelor of science degree in mathematics and his science doctorate from ULB. A UCL associate professor from 2000 to 2002, he became a full professor in 2003. He is president of UCL’s Institute of Statistics, Biostatistics and Actuarial Sciences and teaches finance, mathematics of financial markets, pension finance, life insurance, and other subjects. He co-directs, with Dr Alexia Autenne, the Chair for Excellence on Pensions.