C17 - Valuation Data DONE

Question 1

Sources of information that are useful when valuing future benefits and contributions

Answer 1

• Documents relating to current/past operation of the scheme
• Information relating to future operation
• Data relating to the current position

Question 2

Documents that give information to the current and past information of the scheme

Answer 2

• Rules and meeting notes relating to benefits and contributions
• Member booklets and announcements
• Details of last discretionary practices
• Details of precious actuarial advice eg option factors, previous valuation results

Question 3

Important information relating to the future operation of the scheme

Answer 3

• Views in discretionary practices
• Possible future changes to benefits
• Future investment strategy
• Planned levels of general and promotional salary increases
• Events affecting the sponsors ability to fund the scheme
• Events affecting the earning and employment prospects of the members
• Likely changes in regulation

Question 4

Data that can give information on the current position of the scheme

Answer 4

• Accounting data
• Asset data
• Membership data

Question 5

How can accounting data be used in a valuation?

Answer 5

Verify the valuation data (ie assets values, benefit and contributions) and assumptions used and provide confidence in data available

Question 6

Checks to be applied to asset data

Answer 6

• Are all investments permitted
• Are they subject to valuation restricts imposed by rules or legislation
• Do they look reasonable compared to the last set of audited accounts
• Check of the level of investment income implied by assets against that shown in the latest trustee report and accounts

Question 7

Checks on membership data

Answer 7

• Reconciliation of total number of members and changes from last valuation
• Checks for new members
• Compare average ages and amounts with last val and TRA
• Check contributions and pensions against TRA
• Check max and min levels of items
• Spot Check individual member records

Question 8

When is it useful to use summarised data?

Answer 8

• When provisional advice is needed quickly before full data can be provided
• When an approximate check on the funding position on scheme is needed

Question 9

Issues with summarised data

Answer 9

• Data may not be correct
• Rigorous data validation not possible
• Data not suitable for all purposes
• Data may not allow for investigation of experience
• Unsuitable for valuing complex benefits

Question 10

Data protection issues for an actuary

Answer 10

• Be mindful of data privacy since data will often include items of personal or sensitive data
• Steps may be taken to ensure data is not identifiable to an individual eg by using a unique identifier and not using social security number/name
• Ensures safe secure transmission of data