How to set salary escalation assumption for actuarial valuation

salary escalation assumption for actuarial valuation

Salary escalation rate is arguably the second most significant assumption used in an actuarial valuation after the discount rate. However, unlike the discount rate, the reporting enterprise has a much greater role to play in setting this assumption. It is important to understand the complexities involved. Actuarial reporting requirements for employee benefit schemes in India, […]

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FAQs about funded gratuity schemes

faqs about funded gratuity schemes

The mechanics of funded gratuity schemes remain unclear for many companies, due to a lack of regulatory framework and a general lack of understanding of actuarial principles. We have examined the issue to consider for gratuity scheme funding in our prior post. This post sets out a list of frequently asked questions about funded gratuity schemes; i.e. […]

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3 issues about insurer-managed gratuity funds

issue about insurer-managed gratuity funds

Many employers choose to fund their gratuity liabilities by paying regular contributions to an insurance company. However, employers often do not fully understand what they gain from gratuity funds and what to expect from these arrangements.

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4 actuarial services to power up your finance function

actuarial services to power up your business

Advanced actuarial services go beyond the usual realm of actuarial reports or statutory certificates. The ability of actuaries to predict future uncertain events and assess their financial impact can help deliver significant benefits to any organisation. Actuaries are good at making predictions about future uncertain events, and assessing the financial impact of this uncertainty. As […]

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How to set discount rate for actuarial valuation

How to set discount rate for actuarial valuation

There is more to selection of discount rate than simply looking up the interest rates on internet. Many companies don’t realise the complexities involved and need to do more than they are doing currently. Any actuarial valuation involves the use of a ‘discount rate’, which is used to calculate the present value of future benefits promised […]

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3 methods for valuation of employee stock options

methods for fair valuation of employee stock options

With the arrival of Ind AS, companies need to value and account for their stock option schemes using the fair value method. There are more ways in which Ind AS will affect companies running employee stock option schemes. These are described in more detail here. This post only focusses on methods to carry out fair […]

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Discount rate for actuarial valuation as at 30 Sep 2017

Discount rate for actuarial valuation 30 Sep 2017

For many companies, this is the time to finalise their interim accounts for the second quarter of FY 2017-18. An understanding of the movement in discount rate during this period will help in making an appropriate provision towards employee benefits liabilities. Source of the discount rate for actuarial valuation Companies often have to set the […]

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Discount rate for actuarial valuation as at 30 Jun 2017

Discount rate for actuarial valuation 30 Jun 2017

For many companies, this is the time to finalise their interim accounts for the first quarter of the current financial year. It is important to understand the movement in discount rate during this period to make an appropriate provision towards employee benefits liabilities. Source of the discount rate for actuarial valuation Companies often have to set […]

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Governance framework to set actuarial assumptions

Governance framework for actuarial assumptions

Setting the right actuarial assumptions is central to the accuracy of any actuarial valuation. However, there is a general lack of understanding among the stakeholders about how the assumptions should be set. No matter how much care is taken in doing an actuarial valuation, the results could still be useless if assumptions are not set […]

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5 topics related to Economic Capital and Market-Consistent Valuation

economic capital and market-consistent valuation

Topics such as risk-neutral probability and market-consistent valuation are at the heart of a Risk-Based Capital or an Economic Capital (EC) framework. Yet they continue to remain widely misunderstood. As the insurance regulations continue to evolve, it is important to get a proper grasp of some of these concepts. Here is a list of five […]

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