Government actuaries perform risk analysis and generate statistical reports for official financial strategies. They are common in countries with government-sponsored pensions and work with pension and social service distribution payments. Governments may outsource the work to private consultancies, but the UK has a strong government actuarial staff. The Government Actuary’s Department provides expert actuarial services to all branches and divisions of government.
A government actuary is a person trained in actuarial science employed by a government agency or office. The primary job of a government actuary is to perform risk analyzes and generate statistical reports that can be used to devise official financial strategies. Government actuaries are relatively scarce in the United States, but are common in many other parts of the world, particularly in countries with government-sponsored pensions for citizens. In these places, the government actuary helps determine reasonable pension payments, interest rates, and policy standards that balance the needs of the population with the budget and other government obligations.
Actuarial science depends on statistics and probabilities and is concerned with predicting a large number of financial and investment data. Individuals with this type of training are commonly hired by insurance companies, who help set premium amounts based on an individual’s age, driving record, and location, among other things. In the public sector, actuaries generally work with pension and social service distribution payments. They can also deal with government investments, particularly bonds, by predicting the long-term growth of assets based on fixed factors. Bond projections are often made according to the Bernoulli hypothesis, which is concerned with balancing risks.
Most governments employ actuaries in advisory roles. Their main job is to perform complex calculations and make recommendations to senior management. However, hiring full-time actuarial staff is often expensive, and governments may outsource the work to private consultancies and agencies considered experts in the field. This is often seen as saving both money and time, particularly in situations where actuarial calculations do not generate daily or annual work.
In a sense, any actuary who works for the government, even if on a contractual basis, can be referred to as a “government actuary”. Usually, however, the term is reserved for actual civil servants. Most governments hire senior actuarial staff to handle high-level risk analysis for a variety of different transactions. This work is often highly advanced and usually requires significant industry experience. Local governments and community agencies sometimes hire more inexperienced actuaries, but in general, the job of a government actuary is something of an elite position.
Government actuaries in the UK are an exception. The UK has one of the strongest government actuarial staffs of any country. There exists an entire agency – the “Government Actuary’s Department” – with the sole function of providing expert actuarial services to all branches and divisions of government. A government actuary in the UK can work on pension forecasts, financial prospects, investment risk and risk tolerance, and inter-agency insurance needs. Actuaries are often recruited directly out of school into this agency and typically find plenty of opportunity for professional growth and development over time.
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