completed· Governance

Actuarial Studies for the Establishment of Social Security Schemes (ASSESS) : ILO Technical Assistance to the Social Security Fund in Nepal

The strategy of the project is to ensure good financial governance of the newly to be created social security schemes to be implemented by the SSF through actuarial valuations for each of the schemes as a major planning tool for maintaining the long-term future financial sustainability of these schemes as well as the adequacy of the respective benefits and coverage. By providing a solid quantitative framework, actuarial valuations will guide future policy decisions with regard to the individual schemes. Only with the help of sound financial analysis can decision-makers, the social partners and the population at large decide democratically how to enhance and modernize their social security schemes. Reliable data, as a starting point of the valuations as well as requisites for setting future actuarial assumptions to control the dynamics of the scheme, is essential to carry out reliable actuarial valuations. Even though the projection methodologies techniques were the most sophisticated and robust, results of the valuation would be seriously undermined and become unreliable without reliable data. It is therefore important to engage not only the services of an actuary but also of a statistician in order to collect reliable data. The actuary will provide individual actuarial reports for each social security scheme presenting the methodology and results of each actuarial valuation. The principle purpose of the actuarial report is to show how the cost of a given scheme will evolve. However, it also has the objective of presenting a summary of the methods used so that another actuary will be able to understand the bases of the valuation, enabling the report to be reconciled to the next actuarial review. The actuarial report is also important in that it presents complementary information on benefit levels, administration, statistics and investments that are hard to find in other documents on social security schemes. The actuarial reports for each scheme should provide a clear picture of the financial situation and future direction of each scheme, allowing another actuary to be able to make an appraisal of the valuation