IAA Social Security Committee Releases Paper on Measuring and Reporting Actuarial Obligations of Social Security Systems
The International Actuarial Association’s Social Security Committee (SSC) is pleased to announce the publication of the paper Measuring and Reporting Actuarial Obligations of Social Security Systems.
Social security arrangements, particularly social security retirement systems (SSRSs), are founded through legislation and generally very important, both in sheer size and to their many stakeholders. Actuarial measurement of and reporting on their current and expected future financial status are crucial inputs to a proper understanding of their sustainability (their ability to fulfil current promises to pay benefits to people over the long term) and how they affect the finances of the government as a whole and the entire economy as measured in national accounts.
This principles-based paper presents the SSC’s perspectives on measurement and reporting of actuarial obligations of SSRSs and emphasizes the importance of relevant disclosures.
In particular, this paper:
- Discusses the nature of SSRSs and how they differ from, say, occupational pensions,
- Discusses the importance of assessing long-term sustainability of SSRSs,
- Describes the attributes of open group and closed group actuarial valuation approaches,
- Emphasizes the value and importance of using open group approaches in valuing SSRSs and in assessing a SSRS’s long-term sustainability,
- Explains why comprehensive disclosures are critical to supporting informed decision-making about SSRSs, and
- Encourages the involvement of qualified actuaries in performing actuarial calculations.
Barbara D’Ambrogi-Ola, SSC Chairperson, who led the development of the paper, said “The SSC is very pleased to release this paper that we hope will serve as a basis for our future discussions with national and supranational organizations concerned with measurement and reporting of social security obligations. The SSC welcomes any opportunity to engage with outside stakeholders on this important topic.”
The paper is available on the IAA website under PUBLICATIONS/PAPERS.
This activity supports the IAA’s mission to promote the role, reputation and recognition of the actuarial profession. Further, it contributes towards achieving the IAA’s strategic objectives to provide relevant supranational organizations with actuarial input on matters of importance; to facilitate the coordination, use and expansion of the scientific knowledge and skills of the actuarial profession; and, to help enhance the scope, availability, and quality of actuarial services offered by individual members of its member associations.
To learn more about the work of the IAA on this topic, contact the Director of Technical Activities at the IAA Secretariat.