1. This note incorporates a large part of the evidence given to the Scott Committee by the Government Actuary's Department, with additional material by myself as appropriate.

The Pay Comparison system

2. The actuarial calculations in question arise from job comparability exercises, when the value of the total remuneration package of specified jobs is being compared. In recent years, assessments have been made in the following circumstances:

(i) Pay comparison studies for the Non-industrial Civil Service.

(ii) Pay comparison studies for the Industrial Civil Service.

(iii) Adjustments are made by the Review Bodies, who recommend salaries for the Armed Forces, Doctors and Dentists and Top Salaries. The Review Bodies consider various pension comparisons, but are not obliged to give reasons for their salary recommendations.

(iv) Advice to the former Standing Committee on Pay Comparability (Clegg) for staff groups referred to them.

(v) Compensatory additions to pay are quoted for a number of bodies whose staff are paid by reference to Civil Service and other public service rates, but who are in other pension schemes.

This paper addresses certain aspects of management practice. As such, it is unusual if not unique in the catalogue of topics discussed by the Institute, and it is instructive to examine briefly why this may be.

Firstly, management and the skills associated with its successful practice are not specifically actuarial concerns. There are numerous platforms from which one may advance theories of management practice and, because management skills are of general application, those platforms are generally broader than the technical disciplines which draw us together as members of one profession.

Secondly, the opportunities for and the consequences of good management are necessarily imprecise, relating as they do to the enhancement of ventures of all kinds through the intelligent use of that most indispensable resource available to managers: the individuals on whom they can call to execute the consequences of their decision-making. The degree of imprecision is so great that the practice of management is frequently termed an art rather than a science. The net of actuarial science has a mesh of a shape to catch a number of philosophies (such as the concept of Equity) which are not purely value-based—but the philosophy of human-resource management has never been one of these, escaping from the sweep of our professional scrutiny to be caught (if at all) in the trawl of the behavioural sciences. It is certainly possible to succeed in the written examinations leading to an actuarial qualification without any consideration of the aptitudes, skills and resources needed for good management.

In my 1981 paper ‘The flock and the sheep’ (J.I.A., 108,361) I explained that I had been writing a number of historical essays and that the paper was based on those which were about distribution of surplus. Some of the remaining essays fall naturally into a set under the general heading of valuation and it is these which have been combined into the present essay. It also includes something which has been on my conscience for a number of years—a critical examination in the light of history of my 1952 paper on the principles of valuation (J.I.A., 78, 286).

1. The English Life Tables Nos. 8 to 13 are based on the population figures by age obtained at the successive censuses of England and Wales from 1911 to 1971 and the deaths recorded in the three calendar years centred on the census year. Over this 60-year period there have been changes in the information sought regarding age at census and death registration and improvements in the exposed-to-risk formula; these are summarized in Table 1.