News May 2019 Actuarial Statement of Recommended Practice 1: Financial Analysis of Social Security Programmes (ASO

Actuarial Statement of Recommended Practice 1: Financial Analysis of Social Security Programmes (ASORP 1) 

31 May 2019
The FRC has today published ASORP 1: Actuarial Statement Of Recommended Practice 1

ASORP 1 promotes high quality technical actuarial work where actuaries are performing a financial analysis (or analyses) of Social Security Programmes (SSPs), or reviewing, advising on, or opining on such analyses.

This standard applies to technical actuarial work in the scope of ASORP 1 which is completed on or after 1 September 2019.

The FRC published revised Technical Actuarial Standards (TASs) in December 2016, with an effective date of 1 July 2017. During the review supporting the revision, we identified that technical actuarial work related to Social Security Pensions represents a high level of risk to the public interest. We considered including this work in the scope of TAS 300: Pensions but concluded that a more appropriate approach was to adopt the model standard, International Standard of Actuarial Practice 2: Financial analysis of social security programs (ISAP 2 (2017)) issued by the International Actuarial Association (IAA) to support the application of TAS 100: Principles for technical actuarial work to this work.

Last November the FRC consulted on a proposed Exposure Draft for the UK implementation.  The consultation period ran to the end of January 2019 and we have now published:
The FRC’s Framework for developing Standards, Statements of Practice, Codes and Guidance sets out the hierarchy of authority and the categories of FRC’s policy publications.

Documents issued under the category for policy publications which are on a “comply or explain” basis are typically called Statements of Recommended Practice (SORPs). The level of compliance required and the prescriptive nature of ISAP 2 (2017) mean that a SORP is the most appropriate form of adoption. ISAP 2 (2017) uses “should” statements throughout which are on a “comply or explain” basis rather than a mandatory “must” basis. It also provides illustrative examples as non-mandatory guidance using “may” statements.  

Members of the Institute and Faculty of Actuaries are required to comply with ASORP 1 for work in its scope.
Wider adoption is encouraged.

More details can be found on the FRC website .

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