Where employment compensation has a meaningful pension-loss or future-loss component, the figure rests on actuarial choices — discount rates, mortality, accrual rates, retirement assumptions, the appropriate horizon for projected loss. The conventional approach treats these as inputs to a formula; the methodological position is that they are decisions whose justification has to be defensible at tribunal or in cross-examination at settlement. The right actuarial input is calibrated to the specific claim, not pulled from a stylised lookup table.
Where the actuarial question lives in an employment claim
Most employment compensation runs on a fairly direct line: lost earnings to date, projected future loss, mitigation evidence, statutory caps where relevant, plus the claim-specific heads of loss. For straightforward dismissals where the claimant returns to comparable employment quickly, the calculation is largely arithmetic and well within the range a good employment lawyer can prepare unaided.
The methodologically substantive question appears at the edges. Discrimination claims with longer-horizon loss because the protected characteristic itself impairs return to work. Pension loss in matters where the dismissed employee held meaningful defined-benefit entitlements that won’t be replicated in subsequent employment. Settlements offered late in the process where the parties want a figure that holds up against later challenge. Cases where the claimant’s career trajectory or future earnings are themselves contested. In each, the compensation figure rests on assumptions that are properly actuarial — mortality, discount rates, expected investment returns, persistency of benefit accrual, the appropriate horizon for loss.
The Employment Rights Bill, in extending unfair dismissal to a day-one right and extending the claim period to six months, broadens the population who may bring claims and lengthens the horizon over which losses accumulate. That structural change pushes more matters into the territory where the actuarial question is substantive rather than peripheral.
Pension loss as the methodologically critical component
Pension loss is the most consistently actuarial element of employment compensation, and the one most often handled imprecisely in tribunal contexts. The Presidential Guidance on pension loss in employment tribunals distinguishes ‘simple’ and ‘substantial’ loss methodologies; the simple methodology works for routine cases, the substantial methodology is required where the employee held a meaningful DB entitlement or where the loss horizon is non-trivial.
Even within the substantial-loss methodology, the assumption choices matter materially. Discount rates, expected accrual rates, mortality, retirement age assumptions, and the treatment of survivor benefits can each move the figure by a non-trivial amount. A pension-loss calculation prepared by an actuary calibrated to the underlying scheme rules and to current market parameters is materially different from the same calculation performed using stylised lookup tables.
The Fair Value Framework methodology the firm applies across its broader pension valuation work is the same methodology that produces the pension-loss figure here. Methodology consistency matters: a pension-loss figure produced in an employment-tribunal context that uses the same methodology applied in matrimonial and litigation contexts is more easily defended than one produced on a stylised basis specific to the employment context.
Settlement validation
A distinct methodological position: a compensation offer is on the table, the parties are considering whether to accept, and the question is whether the figure is actuarially defensible. This isn’t about producing a fresh case-construction calculation — it’s about reviewing the offered figure against the assumption set the offer implies, and forming a defensible position on whether it sits within the range a tribunal would consider reasonable.
Settlement validation is often the most cost-effective form of actuarial input. The lawyer doesn’t need a full pleaded-case loss calculation; they need a senior actuary to look at the offered figure and tell them, with reasoning, whether to recommend acceptance. The deliverable is a short written analysis with the key sensitivities surfaced. The methodology is the same as full case-construction; the engagement shape is calibrated to what the settlement decision needs.
The regulatory frame — and what it means for engagement
One feature of this work that distinguishes it from broader actuarial practice: advice on compensation amounts in regulated claims is itself a regulated activity under FSMA. An actuarial firm performing this work for an employment claimant — or formally advising on the figure — needs to hold FCA authorisation under the Claims Management Companies regime. Most actuarial firms don’t hold that authorisation; their input has to be structured as analysis-on-instruction rather than as advice on the compensation amount. The firm holds CMC authorisation (FRN 831289) and is the first FCA-authorised actuarial firm authorised to perform this regulated activity for employment compensation.
For the instructing lawyer this matters in two ways. First, where the analysis is being commissioned to support direct advice to the claimant on whether to accept a settlement, the firm performing the analysis must itself be authorised. Second, where the matter may proceed to tribunal with the analyst as named expert, the regulatory authorisation supports the firm’s standing as an expert in this area. The authorisation is structural rather than declarative — it is what makes the engagement possible at all in some configurations.
Engagement scoping
The first conversation establishes the methodologically substantive features of the matter: claim type and the claimant’s key facts (age, salary, employment history, scheme membership where relevant); the procedural stage (pre-issue, post-issue, post-disclosure, settlement-stage, post-tribunal); the compensation figure under discussion if any; and what the analysis needs to do (case construction, settlement validation, expert evidence, or a combination). The firm scopes the work from there.
Last updated May 2026.