Introduction: Quantifying and reporting social security obligations

Abstract

AbstractIn a context of increasing transparency of social security scheme design and financing, assessing the financial implications of the promises made to current and future retirees of a social security pension system has become a key issue. The central role played by actuaries in the financial evaluation of social security systems means that the debate regarding methods and assumptions to use in such an exercise is of interest to all actuaries, those who use their work and those whose decisions are based on their work. This, in theory, appears a rather technical debate. However, in reality, these deliberations have a much wider impact. The discussion around how to assess the implications of promises made by social security systems to current and future populations will affect the decisions taken regarding the key features of systems, in particular the social contract between generations. It also feeds into the debate regarding sustainability, inter‐ and intra‐generational equity, the adequacy of benefits and the robustness of systems; that is, how future changes to the economic and demographic environment will affect systems. This introductory article discusses the importance of this topic including the implications for actuaries, policy‐makers and other stakeholders and then summarizes the six substantive articles that comprise this special issue. These articles reflect different points of view, but also different experiences and environments – which adds to their value as contributions to this important debate. Finally, this introduction sets the context for the reader – to ensure that the technical aspects of the set of papers are considered within the wider framework of social security provision and financing.