Actuaries in Pension Systems
The field of occupational pensions, as well as broader questions related to retirement provision, is represented within the DAV by the branch association IVS (Institute of Pension Actuaries). The scope of work for IVS actuaries has significantly expanded in recent years. In addition to traditional calculations based on actuarial models and methods, it is increasingly necessary to place mathematical issues in retirement provision within the broader economic, tax, and legal context and to communicate the results in a transparent and understandable way. The "Pension Actuaries" of IVS possess the broad expertise required, making them specialists in advising and supporting all types of pension systems.
The work of the IVS experts is primarily focused on the valuation of obligations in the area of occupational pensions across all implementation forms. In addition, the area of private pension provision also plays an important role in the work of IVS members.
Calculation of Pension and Provisions Reserves
For pension funds, pension schemes, support funds, as well as for direct commitments and direct insurance, actuaries calculate pension and provisions reserves according to supervisory and tax regulations, as well as commercial and international accounting principles. Additionally, they prepare analyses of the future development of pension obligations and their financial impact on companies, and calculate the financing of pension claims for the workforce of companies.
Responsible Actuaries at Pension Institutions
At legally independent pension institutions, IVS actuaries review the financing and long-term sustainability of obligations, continuously monitor the developments in the portfolio, assess the financial situation, calculate the required cover capital, and develop proposals for surplus participation or benefit reductions if necessary. They also contribute to the drafting and modification of benefit guidelines. They bear special responsibility in their role as responsible actuaries at pension institutions (pension or funeral funds, pension schemes).
Pensions Committee
The working groups of the Pension Committee
To address the wide range of issues in the field of occupational pension plans, the committee has established the following active working groups:
The working group addresses issues related to the derivation of biometric assumptions for employers’ pension obligations. The working group’s tasks include, in particular, the question of the applicability of the 2018 Heubeck tables for the valuation of pension obligations, as well as considerations regarding minimum standards for the development of appropriate tables or other biometric assumptions.
The working group focuses on the methodology for developing and reviewing biometric calculation bases for occupational pension schemes (EbAV), specifically for pension funds and pension plans. In addition to the actuarial principles for deriving and reviewing calculation bases and their application, the group also focuses on the legal framework.
The working group is addressing the issue of cross-pillar pension information. Particular attention is being paid to the relevant plans currently being promoted by policymakers. The working group will monitor these developments and, if necessary, prepare statements from an actuarial perspective.
The working group’s objective is to analyze the impact of the ongoing low-interest-rate environment on the feasibility of guarantees in occupational pension schemes, identify potential areas requiring action, and discuss possible solutions and courses of action.
The working group addresses fundamental issues related to pension funds as a vehicle for occupational pension plans. It monitors current developments and the legal framework at the national and European levels from an actuarial perspective and reviews existing DAV documents on pension funds. In doing so, it pays particular attention to the regulatory requirements applicable to pension funds.
The working group addresses fundamental actuarial issues related to pension funds in occupational retirement plans and coordinates the activities of all FAV working groups that also deal with pension funds. It discusses various requirements and develops position statements, technical concepts, and guidance for actuaries in this field.
The working group is responsible for the independent quality assurance of the specialized knowledge exams in the subject of “Pensions” and, starting in 2021, for the other exams for IVS experts as well.
The working group focuses on the accounting treatment of pension obligations and other long-term employee benefit obligations under the German Income Tax Act (EStG), the German Commercial Code (HGB), IFRS, and US GAAP. It issues statements on new regulations and initiatives, updates the guidance on IAS 19, and maintains close ties with institutions that also deal with accounting issues and occupational pension plans.
The working group addresses various issues related to defined contribution plans, including communication, pension administration, and accounting, and prepares technical papers on specific topics. In addition, the working group reviews and comments on new legislative proposals and regulatory changes pertaining to defined contribution plans.
Among other things, the working group addresses topics such as the BaFin circulars on internal risk assessment (ORA) and the minimum requirements for the organizational structure of occupational pension institutions (EbAV), the structure of the independent risk control function (URCF) and the actuarial function (VMF), as well as the content of an internal risk assessment and the tasks of risk management.
The working group monitors public discussions regarding collective old-age provision under Pillars I and II in Germany. It analyzes selected articles, papers, studies, and publications on old-age provision and evaluates them from an actuarial perspective. In addition, it fact-checks selected statements on social security, paying particular attention to intergenerational equity and current political proposals for reforming the statutory pension insurance system.
The working group focuses on the actuarial aspects of pension rights equalization in occupational pension plans. As part of its work, the working group provides practical guidance through guidelines and reports on its findings.
The pool is a flexible framework for collaboration within the Pension Committee that allows members to participate in various projects. Each project has a clearly defined objective and is time-limited. Members of the pool can decide individually which projects they wish to participate in, based on their interests and availability, giving them the opportunity to contribute their strengths in a variety of subject areas.
