The social security institution ensures that regular actuarial valuations are conducted to assess and monitor the financial situation of social security programmes. The social security institution further ensures that an actuarial valuation is conducted at the inception of a new programme, or whenever an existing programme is materially changed.
Actuarial valuations are primarily required to assess the sustainability of social security programmes but may also be required to assess system adequacy, financing and funding considerations. Findings of actuarial valuations also have an impact on investment decisions, benefit calculations and communication or disclosure. This guideline should be read together with Guidelines 26, 41, 43 and 46 and Guideline 59 of the ISSA Guidelines on Good Governance.
- The social security institution should support the relevant authorities in defining the situation when an actuarial valuation is required (regular, supplementary and/or updated valuations) and the factors impacting this choice (e.g. materiality levels). The social security institution should provide necessary information and advice regarding the scope and objectives of a valuation as well as minimum disclosure requirements. Guideline 46 provides assistance in determining which situations may require a supplementary or updated actuarial valuation.
- The social security institution should advise the relevant authorities on the optimal frequency of actuarial valuations. This issue is covered further in Guidelines 26 and 43.
- In the absence of legislative requirements, the social security institution should establish and follow an internal policy on the need for an actuarial valuation. This policy should be documented, reviewed regularly (if necessary, by an external independent expert) and acted upon.
- The social security institution should promote and support relevant legislation requiring regular actuarial valuations of existing programmes and the carrying out of actuarial valuations whenever a programme is materially changed.
- The social security institution should ensure that resources are made available to ensure that regular valuations are carried out. The management of resources should also take into account situations where supplementary or updated valuations are required.
- When participating in the development of new social security programmes, the social security institution should ensure that an actuarial valuation is performed to assess the appropriateness of the benefit and financing design. Guideline 41 provides more information regarding the valuation of new social security programmes.