This article is derived from a recent Actuarial Study published by the Office of the Chief Actuary (OSFI, 2012), and both authors were part of the working team for this Actuarial Study.
Actuarial balance sheets as a tool to assess the sustainability of social security pension systems
Version of Record online: 9 APR 2013
© 2013 Crown in the right of Canada International Social Security Review © 2013 International Social Security Association
International Social Security Review
Volume 66, Issue 2, pages 31–52, April-June 2013
How to Cite
Billig, A. and Ménard, J.-C. (2013), Actuarial balance sheets as a tool to assess the sustainability of social security pension systems. International Social Security Review, 66: 31–52. doi: 10.1111/issr.12008
The authors would like to thank the OCA staff who assisted in the preparation of the original Actuarial Study as well as this article. The authors would also like to express their gratitude to Ole Settergren for answering questions regarding the Inkomstpension system and providing valuable feedback, and to Alice Wade for answering questions regarding the United States OASDI programme.
- Issue online: 9 APR 2013
- Version of Record online: 9 APR 2013
- social security scheme;
- pension scheme;
- method of financing;
- actuarial valuation;
- United States
The choice of the methodology used to produce a social security pension system's balance sheet is mainly determined by the system's financing approach. In this article, it is shown using the example of the Canada Pension Plan that if the assessment of the financial sustainability of a pay-as-you-go or partially funded system is done through the means of an actuarial balance sheet, then the methodology used should take into account future contributions of current and future participants. The balance sheets produced using the open group approach, as well as methodologies used in United States and Sweden, are discussed.