In determining the rate of return to be credited to provident fund accounts of beneficiaries the actuary considers relevant factors, the impact of decisions on the sustainability of the scheme and the adequacy of benefits. The actuary uses his or her judgement in developing appropriate assumptions and methodology and in making recommendations.

While the key principle underlying the operation of provident funds is that the sum of provident fund accounts balances should broadly be equal to the total value of assets in the fund, a range of factors and the impact of varying policy aims means that the return credited will likely differ from the returns actually achieved on assets. The rate of return to be credited to provident fund accounts of beneficiaries depends on factors such as legislative requirements, the design of the scheme, the returns actually achieved on underlying assets, the smoothing policy and the amount of investment reserves held, if any. This guideline should be read in conjunction with Guidelines 7, 22 and 24.