Define: Actuarial Assumptions

UK Accounting Glossary

Definition: Actuarial Assumptions


Quick Summary


There are 2 different types of actuarial assumptions relevant to post-employment benefits: Demographic Financial Demographic Assumptions make assumptions about the characteristics of employees; for example – Mortality and/or disability rates. Financial Assumptions make assumptions around fiscal variables such as the anticipated costs of medical treatment and/or anticipated salaries. An entity that operates a defined-benefit pension scheme



What is the dictionary definition of Actuarial Assumptions?

Dictionary Definition


Acuturial Assumptions are estimates of future variables used to calculate the likely costs of pension schemes and life assurance policies, and consequently in order to set the appropriate contributions and benefits.


Full Definition


There are 2 different types of actuarial assumptions relevant to post-employment benefits:

  • Demographic
  • Financial

Demographic Assumptions make assumptions about the characteristics of employees; for example – Mortality and/or disability rates.

Financial Assumptions make assumptions around fiscal variables such as the anticipated costs of medical treatment and/or anticipated salaries.

An entity that operates a defined-benefit pension scheme is required by law to disclose the actuarial assumptions it utilised when compiling it’s obligations under the scheme, which also includes the discount rate used within the calculation.


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