Excellence in administration

  • Guidelines:
  • Actuarial Work for Social Security

Excellence in administration

  • Guidelines:
  • Actuarial Work for Social Security

Actuarial Work for Social Security -
Guideline 4. Valuation methodology

The valuation methodology is consistent with the social security scheme financing approach and enables the actuarial assessment of its sustainability measures or indicators. The actuary provides an opinion on the appropriateness of the methodology.

The choice of the methodology used to evaluate the situation of a social security scheme is often the responsibility of social security institutions. Legislation may specify at least some elements of the methodology to be used. Actuaries should advise the social security institution and, ultimately, policy-makers on the choice of valuation methodology and appropriate measures of financial soundness (the latter is discussed in more detail in Guidelines 45 and 46). Specific considerations in assessing the financial situation of new schemes as well as reformed schemes are covered in Guidelines 43, 44, 46 and 49.