Excellence in administration

  • Guidelines:
  • Actuarial Work for Social Security

Excellence in administration

  • Guidelines:
  • Actuarial Work for Social Security

Actuarial Work for Social Security -
Guideline 3. Assumptions

Assumptions used for a valuation of a social security scheme are sufficient to value the scheme in accordance with its financing objectives and consistent with the overall socio-economic environment of the country. The development of assumptions combines the analysis of historical trends with a forward-looking approach. Social security institutions assign major responsibilities to an actuary in the assumption-setting process. An actuary provides an opinion on the extent to which the assumptions used for actuarial work are reasonable and appropriate both individually and on an aggregate basis.

By their nature, social security programmes cover wide segments of the population. Thus, economywide and nation-wide economic and demographic assumptions are often needed for the purpose of performing social security valuations. The development of the assumptions for social security valuations is often a joint exercise that involves inputs from many parties: experts from social security institutions, various governmental organizations and independent bodies of experts. Moreover, some of the assumptions may be prescribed by legislation or provided by various governmental organizations.