Depending upon the legislation, policy or decree that establishes the social security programme, the board and management of a social security institution may be duty bound to maintain an adequate level of funding to deliver the promised benefits to members and beneficiaries of the scheme, and to ensure the cost effectiveness of the administration of the social security programme.

In this respect, the key challenges will include defining and maintaining the actuarial soundness of the fund; adopting and complying with the actuarial measures; balancing the inflow of contributions and income from investments with the outflow of benefit payments; and benchmarking operating expenses.

These four guidelines will help address the actuarial soundness of a social security programme.