A hundred years ago last Saturday, on 24 November 1884. Dr Thomas Sprague. my sometime predecessor in this office, delivered an Address. He opened by announcing that, after prolonged and painful negotiations, a Royal Charter had been granted to the Institute placing it, in his words “…as a professional body publicly recognized as representing, and entitled to speak in the name of, actuaries in the United Kingdom”. It was impossible, he wisely added, to predict exactly what new duties would devolve upon the profession as a consequence of this change.

1.1. The Institute has discussed papers on most aspects of institutional investment in recent years, with the notable exception of property. This is not due to the lack of importance of this investment sector to pension funds and life offices, but perhaps to the greater role of actuaries (rather than surveyors) in the other investment media and to the interest in mathematical models for gilts and equities.

1.2. In this paper we have not tried to produce a mathematical model of the property market, a new valuation method for property or solutions to the extensive problems of property performance measurement and indices. We have, however, tried to pull together, in a single paper, the volumes of material on the property market and property valuation methods. We have also tried to set down some of the pitfalls of property performance measurement, which often tend to be overlooked in the relentless pursuit for more statistics in this important area.

1. Salary scales have been widely used in actuarial literature about pension schemes, but they do not seem to have been developed beyond the idea first introduced by Manly (1901) and used in a series of papers following this, including McGowan (1901), Manly (1902, 1903 and 1911), and M'Lauchlan (1908). King (1905), Bacon (1907) and M'Lauchlan (1914) discuss the construction of a salary scale from records of individual employees. King made some valuable observations on how a salary scale may change with time if the observed population is not a stationary one, for example, because the firm is growing or declining, which Bacon also commented on, and M'Lauchlan went into considerable detail about the separation of different grades. Thomas (1913) gave an example of an organization with six ranks, within each of which there was a salary scale, and showed explicit probabilities of promotion in each year of age. His development comes closest to what I shall discuss below. Text books on Life Contingencies, such as Jordan (1952), Hooker & Longley-Cook (1957) and most recently Neill (1977), have followed essentially the definition introduced by Manly, as also have papers and text books on pension funds, such as Porteous (1936), Marples (1948), Heywood & Marples (1950), Crabbe & Poyser (1953) and Lee (1973). Curiously Spurgeon (1922) does not mention salary scales, although his book was written after they had come into use.

This note continues an annual series on mortality rates in Great Britain; the previous note in the series appeared in J.I.A. 111, 181 and dealt with mortality in 1981.

Following the 1981 Census, revised estimates of the ‘home’ population of England and Wales since 1961 have been published. These allow for revision of past estimates in the light of the Census and also for a new definition of ‘home’ population, which brings the concept closer to that of ‘resident’ population. The ‘home’ population is now defined as including residents temporarily outside the country but excluding foreign visitors. It includes members of both H.M. and foreign forces stationed in the United Kingdom but excludes members of H.M. forces who are stationed abroad.

P. 224, line 2: Manchester Guardian should read Guardian.

P. 383, line 9: The second occurrence of e2 should read e3.