The board implements the established actuarial measures to ensure the financial sustainability of each of the social security programmes established by the institution. For institutions that have investment reserve funds, standards and benchmarks are established for the returns on investments to support the financial sustainability of the social security programmes.
Guideline code
GG_01400
Mechanism
Mechanism
- The design and actuarial measures of each of the social security schemes must be documented and well defined.
- The internal actuary and/or the external actuary may be mandated to report to the external authority with jurisdiction over the social security institution.
- Whether by policy or rule of thumb, a minimum rate of return on fund investments may be established to support the financial viability of the programme (the so-called actuarial hurdle rate) and/or ensure the sufficiency of accumulated member accounts for the contingencies covered by the programmes.
- The governance framework defined by the ISSA Guidelines on Good Governance may serve as a reference point to identify the potential areas which could be impacted upon by the various risks faced by the institution.
Section B.4 provides more guidelines on actuarial soundness, with corresponding structures and mechanisms to facilitate the application of the guidelines.
Structure
Structure
- Legislation, policy or decree should identify the competent authority to determine the design, the actuarial measures and the financial sustainability principles of the social security scheme, to decide on any changes in its features, and to ensure compliance with these measures or principles.
- There should be no conflict of interest between the authority that sets the measures and the authority that implements these measures.
- There should be an internal actuary and/or external actuary reporting directly to the board, to perform regular and periodic actuarial reviews of the different social security programmes established by the institution.
Title HTML
Guideline 11. Financial sustainability of the programme
Type
Guideline_1
Weight
18