PGN206 AIDS and Retirement Funding
Compliance PGN206 is advisory for actuaries giving consulting advice to or performing actuarial valuations on retirement funds and discusses how the actuary should take into account the issue of AIDS when performing actuarial valuations on retirement funds.
Related Guidance Notes
PGN103: Report by Statutory Actuary in Financial Statements
The purpose of PGN103 is to specify the minimum content of the Statutory Actuary’s report in the long-term insurer’s annual financial statements and compliance is mandatory.
AIDS (and its effects on mortality assumptions) is mentioned as an example of expected future deviation (that needs to be stated) from recent experience when setting Published Reporting Liability Valuation Assumptions. The assumptions (before adding margins) then need to be adjusted for the expected increase in the occurrence of AIDS-related claims.
PGN104: Valuation of Long Term Insurers
PGN104 considers the valuation of a long-term insurer’s assets, liabilities and capital adequacy requirements and compliance is mandatory for Statutory Actuaries performing valuations for the purposes of published financial reporting, statutory reporting, and tax liability calculation.
In the Financial Soundness Valuation of Liabilities, the Best-estimate assumptions for mortality and morbidity need to allow for the best-estimate of the effect of AIDS.
The Intermediate Ordinary Capital Adequacy Requirement (“IOCAR”) requires that one-third of the best estimate AIDS liability must be allowed for.
PGN201: Actuarial Valuation Reports
This professional guidance note is classified as mandatory for statutory valuations in the RSA, and as best practice for other valuations. It is meant to assist actuaries in performing their duties to retirement funds and to set requirements for valuation reports.
When using a current cost method of valuing risk benefits before retirement, AIDS is mentioned as an example of items that must be mentioned that can affect the likely future cost of these benefits.
PGN301: Post-Retirement Medical Provision
Compliance with this professional guidance note is best practice for members when providing actuarial advice to clients on post-employment health care benefit plans of a defined benefit nature.
When setting assumptions, it may be appropriate to take into account higher mortality as a result of AIDS. However, the actuary should also bear in mind the higher medical scheme costs associated with the disease.
PGN 501 v1: HIV/AIDS: Actuarial Advice and Reports.
This guidance note sets out the key considerations that the actuary needs to address when advising in a professional capacity on impacts or aspects relating to HIV/AIDS.