Actuarial Valuation Assumptions and Impacts

Following the sharp decline of interest rates of that of last year-end (~8% to ~5%), a dramatic increase in retirement liabilities and pension cost for 2019 is expected. Under an actuarial valuation in accordance with Philippine Accounting Standards 19 (PAS19), the retirement liabilities and pension cost are most sensitive to the volatilities of market interest rates. The Miravite Actuary says: There are other assumptions that affect a company's liability. This is the most opportune time to revisit these, such as the turnover rates and the salary increase rates. Talk to your Actuary. See if recent experience would lend to higher attrition rates so that the resulting liability would partially offset the significant liability increase. There are parameters that one cannot control in compliance with regulations – but this can be mitigated by adopting best-practice standards on other aspects of your valuation. Your Actuary can certainly help now.