Appropriateness of the actuarial interest rate for regulated pension funds

Overview

The following explanations of the professional standard contain a simple procedure that the responsible actuary, the actuarial expert, or the person holding the actuarial function can use to assess the appropriateness of the actuarial interest rate. The appropriateness should be assessed in two application scenarios: for existing contracts and for new business. It also describes the measures that can be taken to respond to the need to reduce the actuarial interest rate and how a resulting increase in the actuarial reserve can be financed. This overview serves only as an initial orientation and does not replace consideration of the explanations of the professional standard.

This professional standard applies to a pension fund when performing actuarial tasks, particularly in the role of the responsible actuary, actuarial expert, or the person holding the actuarial function of a pension fund. The scope of this professional standard includes tariffs approved by the supervisory authority. The technical principle is therefore primarily relevant for regulated pension funds, but is also partially applicable to approved tariffs (“old portfolio”) of non-regulated pension funds.