The social security institution ensures that the scheme liabilities are taken into account in the investment process.

The actuary should comply with national regulatory requirements, national and international actuarial standards, and national and, where applicable, international relevant professional guidance. Social security institutions should ensure that there is support for the actuary in this respect. Other professionals involved in actuarial work should also ensure compliance with relevant professional standards and guidance.

The social security institution decides whether internal or external expertise is to be used to carry out the actuarial work related to social security schemes. The social security institution seeks to develop the internal actuarial expertise to perform actuarial work for a social security scheme.

The institution establishes an efficient organizational structure adapted to the needs and circumstances of difficult-to-cover groups.

The institution embraces electronic payment and online services and builds its success as an agency that adopts smart and cost-effective ways of delivering benefits and services and collecting contributions, giving due consideration to technical limitations and the characteristics of the target groups.

The communication unit allocates and spends its budget to achieve its goals in the most effective and cost-efficient manner.

Communication is a strategic tool in change management. Information is provided on what the change is, why it is necessary, what will be the benefits, and how and when it will be implemented. Good communications allow for issues to be quickly identified and addressed while maintaining momentum and building acceptance for the change.

To carry out its mandate and mission on contribution collection and compliance, the institution establishes a strategic plan covering at least a medium-term period.

The institution implements systematic and standardized data exchange to improve the effectiveness and efficiency of the contribution collection and compliance system.

This data exchange must be controlled in order to protect people’s privacy, and balanced by a right to access and modification under the surveillance of an independent authority.

The board is the group of persons who, under the legislation or by-laws establishing the entity, is given the responsibility to govern the social security programme and to exercise oversight on its administration. The entity could be a government ministry or department, a statutory body or a private entity.

The 21 guidelines for the board support and promote the following five principles of good governance, as applied to social security institutions:

1. Accountability

2. Transparency

The board regularly, accurately and in a timely manner informs the stakeholders and the general public on the status of the social security institution and its operations.

Legislation, policy or decree provides for the independence of the Head of Management from political interference by prescribing the selection process and by defining the grounds for removal from office solely for just cause.

Members and beneficiaries are regularly and periodically informed of their rights and privileges.

A process model is developed for each administrative area to identify the potential points of failure, the internal or external events which can trigger risk, and the corrective measures to be implemented. There is ownership of responsibility for the potential points of failure.

The investment unit follows the prudent person principle in managing the funds of the institution. The prudent person principle is integral to the fiduciary duties of the board and management in administering and managing the funds of the institution.

The institution provides its members with quality service in the distribution of programme benefits.

There are three main aspects to corporate use of ICT) in social security institutions:

This set of guidelines addresses the delivery and support of ICT services, covering the aspects related to the overall software and service life cycle (planning, development and software construction, operations and maintenance). The purpose of ICT service delivery is to provide agreed levels of service to users, and to manage the technology that supports the application of administrative procedures implemented by the institution.

The institution has a workplan to manage the overall implementation of interoperable social security programmes.

Implementation may depend on prior steps having been achieved, such as developing supporting information systems, signing agreements with other organizations and installing enabling technologies. The workplan should cover all required information resources and products and facilitate economies of scale in implementation.

The institution develops mobile-based services according to institutional plans, taking into account the main types of user interaction and system integration approaches.

The institution implements the master data systems taking into account the functional requirements of all involved business areas of the institution.

The institution, in coordination with the others participating in the agreement, establishes an interoperability framework to implement international agreements.

The guidelines presented here are applicable to the board, management, investing institution, investment committee and investment units. While recognizing that some social security institutions carry out investment management internally while others use external managers, they aim to allow institutions to follow a progressive process of governance.

In setting the objectives of the social security institution, the board considers the role of socially responsible investing (SRI) and environmental, social and corporate governance (ESG) to ensure the investment policy and strategy are consistent with the mission (where the mission includes elements of SRI and ESG).

This objective applies to both an internal investment institution and an external investment manager.

This part of the guidelines refers to investment processes carried out by internal and external investment management units respectively.

Although there are many common areas between the processes for internal and external investment management, there are a number of governance requirements that apply solely or differently to either internal or external investment management.

The following guidelines are organized in two sections:

Section D.1, Internal Investment Management