Quantum Mechanics is a portentous name; the alternative—Wave Mechanics—is almost as bad. The mathematics are formidable, the literature large and growing rapidly, and the subject-matter dealt with is the behaviour of physical things, such as electrons, protons, atoms, and so on. Why, then, should actuaries as such take any interest in the subject?
In considering the subject of my Address to you this evening my thoughts have naturally turned to the problems resulting from the War, and I propose later on to refer to some of these. But before doing so it is, I think, worth while to look back and to review some of the achievements we can claim during the present century. I choose this period because it is one during which some most valuable work has been done by the Institute, and also because it is nearly that of my own membership of the Institute.
This paper falls into three parts which form a progressive study involving: 1) proposals for the reform of the Income Tax system as related to personal assessments; 2) consideration of the interrelation of Income Tax and Social Security; 3) proposals for the co-ordination of the Income Tax and Social Security systems. Part I of this progressive study is a plea for a business-like administration of the Income Tax system. Part II examines the combined effect upon the individual of the Income Tax system and the Social Security plan proposed by Sir William Beveridge.
The main object is to discuss principles and therefore many points of detail will be omitted, however intrinsically interesting they may be. Satisfactory consideration of principles entails reference to all classes of business which involve an actuarial valuation (viz. life assurance and annuity business, sinking fund business and permanent sickness insurance business). Reference will be made to the National Defence Contribution and the Excess Profits Tax, which are based upon income-tax legislation.
According to the Home Office Statistics of Compensation paid during the year 1938, nearly 40% of the number of cases of compensation in the seven main groups of industries in Great Britain occurred in the mining industry, and 80% of the compensation to workers in the industry is paid by employers who insure their Workmen’s Compensation risk with Mutual Indemnity Associations.
War conditions have added to our tasks and duties, whilst reducing the effective time available for their performance. Simultaneously, war conditions have introduced into our lives, I will not say an element of staleness, but a lack of freshness which robs our efforts of spontaneity. But doggedness is not out of place in war time, and I feel it is not entirely inappropriate that I should find myself approaching the task of preparing this address in the spirit of Dr Johnson's dictum and in the hope that on this occasion it will prove to be, in some small measure, true.
There are many references to pensions in the pages of the Journal, most of them to the provision of pensions by means of private funds. I am proposing, however, to deal with the provision of pensions and life assurance by means of what are known as group schemes—a comparatively modern innovation. Pensions themselves are not new—in fact, references can be found in history to old retainers and the families of dead retainers living on the charity of the barons.