Actuarial Valuation of End of Service Benefits (ESB)

Insights Providing Actuarial Valuation

The purpose of an actuarial valuation is to calculate the \”present value\” of payments that would be made to employees in the future as part of an employee benefit plan.

Actuaries start by making assumptions about future salary increment rates, attrition, and mortality rates. The assumptions are then used to project the benefit payments that will be made from the employer to its employees, as per the rules of the plan.

The Summary will include complete disclosures as required under IAS 19, including but not restricted to the following:

  • Defined Benefit Obligation as of the valuation date.
  • Statement of Financial Position as at the valuation date.
  • Analysis of DBO as at valuation date into Vested and Non-Vested.
  • Re-measurements to be recognized in Other Comprehensive Income.
  • Cost to be recognized in P & l. in the year following the valuation date.
  • Economic and Actuarial assumptions.
  • Maturity Profile of DBO (i.e. the effect of defined benefit plan on the entity’s future
    cash flows).

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