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From “Table 29” to the actuarial balance sheet: is it really that big a leap?

Author

Listed:
  • Anne M. Garvey

    (Department of Economics and Management Sciences, University of Alcalá, Madrid (Spain).)

  • Juan Manuel Pérez-Salamero González

    (Department of Financial Economics and Actuarial Science, University of Valencia, Valencia. (Spain).)

  • Manuel Ventura-Marco

    (Department of Financial Economics and Actuarial Science, University of Valencia, Valencia. (Spain).)

  • Carlos Vidal-Meliá

    (Department of Financial Economics and Actuarial Science, University of Valencia (Spain).
    research affiliate with the Instituto Complutense de Análisis Económico (ICAE), Complutense University of Madrid (Spain).)

Abstract

EU regulations since 2017 have required all Member States to disclose their accrued-to-date pension liabilities (ADL) using a standard actuarial cost method and some common assumptions. This applies to both Social Security (SS) schemes and unfunded defined benefit (DB) schemes covering civil servants. These pension liabilities have to be disclosed in a supplementary table referred to as Table 29. An actuarial balance sheet (ABS) can be defined as a financial statement that lists a pension system's obligations to contributors and pensioners at a particular date, together with the amounts of the assets (financial and in particular those from contributions) that underwrite those commitments. The ABS can be used to assess the solvency of SS schemes, whereas Table 29 cannot. This paper develops a methodology to (easily) transform Table 29 into an ABS and compile its associated income statement (IS). To enable policymakers to better understand how the model would function, the paper also contains a country case study based on data from the most recently published Table 29 for Spain. According to our best estimate assumptions, it can be said that the Spanish pension system is partially insolvent because only part of the pension entitlements is backed up by assets, and that the system's sustainability has markedly deteriorated over the period 2015-2018.

Suggested Citation

  • Anne M. Garvey & Juan Manuel Pérez-Salamero González & Manuel Ventura-Marco & Carlos Vidal-Meliá, 2021. "From “Table 29” to the actuarial balance sheet: is it really that big a leap?," Documentos de Trabajo del ICAE 2021-05, Universidad Complutense de Madrid, Facultad de Ciencias Económicas y Empresariales, Instituto Complutense de Análisis Económico.
    • Handle: RePEc:ucm:doicae:2105
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Accountability; Actuarial Balance Sheet; Pension Liabilities; Social Security; Spain; Table 29; Useful Information.;
    All these keywords.

    JEL classification:

    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • H83 - Public Economics - - Miscellaneous Issues - - - Public Administration

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