Guideline 11. Independent expert review

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A social security institution commissions on a regular basis an independent expert review of the work carried out in respect of the social security scheme valuation. The actuary responsible for the valuation fully cooperates with the independent reviewers.

Guideline code

ACT_01200

Mechanism

The Terms of Reference of the independent expert review should address, but are not limited to, the examination of the following areas:

Qualifications of professionals involved in the valuation work;
Compliance with relevant standards of practice and statutory requirements;
The availability and quality of data used for the valuation work;
The reasonableness of methods and assumptions;
Quality of the communication of the results of the valuation work.

The selection process of the independent expert reviewers should ensure that qualified individuals are selected. The social security institution may wish to delegate the selection of reviewers to an independent third-party entity. Alternatively, the social security institution may engage independent professionals from recognized entities to perform the review.
The independent expert reviewers should prepare a report which expresses opinions on all items included in the Terms of Reference, and should produce, as appropriate, a detailed list of recommendations for modifications and/or improvements in the valuation work and processes.
The independent expert review should be timed in such way as to allow the social security institution and actuary responsible for the valuation to analyse and implement, if applicable, the review’s recommendations.
In communicating and coordinating with independent expert reviewers, the actuary responsible for the valuation should comply with national and/or international actuarial standards of practice and/or other relevant guidance including, in particular, IAA ISAP 1 and ISAP 2.

Parent

A. Valuation of Social Security Schemes

Structure

Principles

The social security institution should have a policy in respect of commissioning an independent review, by external experts, of the work carried out in respect of the social security programme valuation. In particular, this policy should specify the following:

The frequency of independent expert reviews;
The Terms of Reference;
The reviewers’ selection process;
The competencies, experience and skills of the reviewers;
The timing of the review;
The deliverables of the review.

The reviewers’ selection process should be transparent. The social security institution should ensure that the reviewers are independent from the institution.
The social security institution should direct the actuary responsible for the valuation to clearly and effectively communicate with the independent reviewers.

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