We are not “predicting the future”, a sadly commonly held utterly wrong view. In fact, no-one on Earth can possibly know the future (when?, in which direction? how far? for how long?).

Some actuaries say “today” is the only evidence we have but this is simply not true, as there is far more than that. I strongly believe that, at any time, “today’s conditions” are useless as an indicator of what will happen over the long-term.

After all, looking back at the history of any interesting financial statistic, we will have observed huge variability (which is what makes it interesting). If we ignore that variability, then we are excluding virtually all of the data we have. Another way of expressing it is to say that a “spot” position just can’t be superior to assessments made taking account of the whole population.

Another related claim is that high returns have no impact upon the final cost of the benefits. Well, with respect, that cannot be correct. If the investment return is truly higher than anticipated, then the cost MUST be lower (for the same benefits) or there will be a surplus (simple diagram).