Employee benefits liability valuation

  Work flow 

The overall flow for GIA Consulting’s employee benefits liability valuation service consists of the following six stages. The process in each stage can be adjusted in scope and depth depending on requirements. 

1. Review of regulations 

Confirmation of rules on annual salary and welfare benefits, categorization of salaries and eligibility of benefits 

2. Review of basic data

Review of data collection; Review of whether standards and eligibility are met

3. Review of actuarial assumptions 

Review of the job category of eligibility, discount rates, turnover rates and mortality rate 

4. Review of calculation by number of personnel and benefits 

- Determination of DBO(Define benefit obligations) and CSC(current service cost) by number of personnel and benefits
- Calculation of other long-term employee benefits

5. Review of the actuarial valuation report 

- Review of footnotes and public notices
- Review of the appropriateness of actuarial gains/losses
 - Review of other changes

6. Issuance of a report 

Issue a report signed by the insurance actuary on matters concerning Step 1 – Step 5 

※ DBO : Defined Benefit Obligation / CSC : Current Service Cost  


 The time required 

 Verification of deliverables 

1. Review of regulations 

Review of rules related to retirement benefits, payout rate, retirement age, other payouts (honorary retirement benefits or other long-term employees benefits) 

2. Review of basic data 

Review of validity, such as current status of employees for each policy and key items on the list (date of birth, gender, date of recruitment, average salary) 

3. Review of actuarial assumptions/Appropriateness of applying basic rates 

Review of the appropriateness of the applied basic rates (promotion rate, turnover rate) and appropriateness of other assumptions (e.g. other long-term employees benefits) 

4. Review of calculation by number of personnel/by benefit 

Review of appropriateness of the values used for DBO, CSC for a given period and other benefits for long-term employees 

5. Review of other incidents (e.g. acquisitions/ disinvestments) 

If the time of occurrence and the share of those eligible are important, whether evaluation has been carried out and whether the assumptions applied to the evaluation of the incident will be reviewed. 

6. Review of adjustments to liability/assets 

Review of changes in the DBO and plan assets 

 Sample Report 

 Additional services