Valuations of a social security scheme are aimed at assessing their actuarial soundness. Soundness may be defined in a variety of ways and social security institutions should define measures of soundness appropriate to their situation and their scheme. As stated in the ISSA Guidelines on Good Governance (Guideline 41), a social security scheme should carry out regular actuarial valuations to monitor sustainability and other key elements.
Guidelines in this part address the main elements of the actuarial valuation, the responsibilities of an actuary, and actions that a social security institution should undertake in order to ensure that actuaries can fulfil their professional duties.
The approach undertaken will depend on whether the actuarial valuation model has been developed internally by the social security institution or whether a valuation is performed using a model developed externally. In this latter case, the approach will again vary according to whether the institution carries out the valuation itself or whether the external actuarial resource does so. Whereas this part focuses mainly on the first two cases, appropriate processes are also required when the valuation is undertaken externally and external advisers should be able to demonstrate compliance with the guidelines and with relevant actuarial standards of practice.