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.
If a social security institution has an internal actuarial department, a regular audit of its operations is to be conducted. If a social security institution employs an external actuarial provider, the parties agree on the ways the social security institution monitors the appropriateness of the external provider’s processes.
In preparing a report on the actuarial valuation of a social security scheme, an actuary considers legislative requirements and relevant professional standards and guidance, as well as the intended audience.
The valuation of a social security scheme includes analysis of future uncertainties and their impacts on the scheme. An actuary identifies and, if possible, quantifies risks stemming from future uncertainties.
The valuation of a social security scheme includes the reconciliation of the value of the sustainability measures, financial indicators and other relevant results between the previous and current valuations. As part of the risk management of the social security scheme, the social security institution examines the main drivers of the changes in results between successive valuations.
The basis chosen for determining the value of the social security scheme’s assets is consistent with the scheme’s sustainability measures or indicators.
This guideline should be read in conjunction with Guidelines 23 and 24.
The projection model is built on actuarially sound principles. It is capable of assessing the material provisions of the social security scheme, projecting its cash flows over the relevant projection period, and evaluating the chosen sustainability and adequacy measures, if appropriate.
The valuation methodology is consistent with the social security scheme financing approach and enables the actuarial assessment of its sustainability measures or indicators. The actuary provides an opinion on the appropriateness of the methodology.
Assumptions used for a valuation of a social security scheme are sufficient to value the scheme in accordance with its financing objectives and consistent with the overall socio-economic environment of the country. The development of assumptions combines the analysis of historical trends with a forward-looking approach. Social security institutions assign major responsibilities to an actuary in the assumption-setting process.
The social security institution ensures the availability of sufficient and reliable data necessary to perform actuarial work. The social security institution is responsible for the management of the data pertaining to the social security scheme participants and provisions, and compliance with data privacy legislation and national standards.
