An important factor in any actuarial problem is the number of lives likely to be involved. It is at first surprising therefore that so little attention is paid to the question of size in our pension fund literature, although a brief consideration of the historical development of pension funds gives some indication of the reason for this situation.

Superannuation provisions were originally introduced for the benefit of employees of the Government in the Civil Service and the Armed Forces. The pensions were allowed to emerge as charges on current revenues and no attempt was made to fund the liabilities. Towards the turn of the last century superannuation provisions were introduced for teachers (consequent upon the Education Act, 1870) and railway staffs, and for the staffs of certain municipalities. The movement grew slowly, although several large firms began to make pension arrangements at this period, and among non-government employers there was a greater tendency to fund the liability for pensions.