Actuarial Audit
Independent review is one of the most important ways SCERS ensures that its actuarial work is accurate, transparent, and aligned with best practices. To provide this assurance, SCERS periodically commissions an Actuarial Audit.
What an Actuarial Audit Is
An actuarial audit is a detailed review of the work performed by SCERS’ consulting actuary. It doesn’t simply re-check the math—it examines the underlying assumptions, methods, and processes used to produce valuations and projections. The audit is typically performed by a separate, independent actuarial firm with no connection to SCERS’ regular actuary.
What the Audit Reviews
An actuarial audit may include:
- Reviewing the accuracy of recent actuarial valuations.
- Assessing whether the assumptions (such as retirement age, mortality, and salary growth) are reasonable and consistent with current trends.
- Evaluating whether the actuarial methods comply with professional standards and best practices in the pension industry.
- Identifying areas where reporting can be improved to make results clearer or more useful to the Board and stakeholders.
Why It Matters
For the Board of Retirement, an actuarial audit provides an additional layer of confidence that the numbers driving contribution rates and funding decisions are sound. For employers, it ensures that the contribution requirements they rely on for budgeting are based on reliable methods. For members, it reinforces that the system is independently checked to protect their benefits and the sustainability of the plan.
Building Trust Through Oversight
The actuarial audit is not about finding fault—it’s about ensuring continuous improvement and transparency. By subjecting its actuarial process to outside review, SCERS demonstrates accountability and builds trust with members, employers, and the public.
Conducting actuarial audits at regular intervals ensures that SCERS is not only meeting today’s standards but also evolving with the best practices of tomorrow.
