FOURTEENTH ACTUARIAL VALUATION OF THE PIFSS AND SECOND ACTUARIAL VALUATION OF THE UNEMPLOYMENT INSURANCE FUND ADMINISTERED BY THE PIFSS
Project properties
- Partners: Kuwait
- Status: Completed
Description
FOURTEENTH ACTUARIAL VALUATION OF THE KUWAIT PUBLIC INSTITUTION FOR SOCIAL SECURITY AND SECOND ACTUARIAL VALUATION OF THE UNEMPLOYMENT INSURANCE FUND The last actuarial valuation of the PIFSS was carried out by the École Nationale d’Administration Publique (ENAP) as at 31 March 2016. The ILO conducted a peer review of the actuarial valuation. The main recommendations arising from the last actuarial valuation report were to: ¿ Maintain the relevance of the social security system and considering that the intention is to gradually shift the emphasis from the Basic to the Supplementary system, it is recommended to periodically increase the total Maximum Insurable Earnings of the combined Basic and Supplementary systems (presently at KD 2,750) in line with the general salary increase. ¿ Determine the most appropriate type of pension adjustment that can be supported by the current contribution level. It should be envisaged to replace the present flat-amount increment by an annual indexation of pensions linked to inflation. Special attention should be paid to the link between pension increments and the adjustment of the minimum pension. ¿ Considering the surplus of the Self-employed scheme, it may be appropriate to review its basic system to ensure that it meets its objectives in terms of social protection. ¿ Based on the analysis of deficits by source, the following recommendations regarding the amortization of deficits should be considered: ¿ Amortizing the cumulative deficit related to investment earnings, including capital and interest at the discount rate used in the actuarial valuation, by instalments over a 15-year period. Then, at the next valuation date, to consolidate the present value of the remaining instalments with the deficit or surplus on investment earnings observed at that time and amortize the total in the same fashion, by instalments over a new 15-year period, and so on in the future. ¿ Amortizing the deficit from other sources, including capital and interest at the discount rate used in the actuarial valuation, by instalments over a 3-year period. 10 ¿ Amortizing deficits resulting from benefit improvements over a period similar to the amortization period generally used for the initial deficit at the inception of a scheme (5 to 10 years). ¿ A written funding policy should set in advance the rules that would dictate: ¿ The method to apply for the elimination of deficits (amortization periods). ¿ In case of surplus, the types of benefit improvements that are allowed and under what conditions. In that regard, it might be appropriate to establish a minimum level of surplus that should be reached before allowing scheme's improvements (for example, a provision for adverse deviations equal to 10 per cent of liabilities). ¿ In case of disequilibrium between contribution rates and the long-term cost of a scheme, the adjustments that should be made to the contribution rates.SDG
Goals
- End poverty in all its forms everywhere
Time
21.02.2021 - 20.02.2024
Budget
368,279 / 492,282
Development Cooperation