Government actuaries perform risk analysis and generate statistical reports for official financial strategies. They are common in countries with government-sponsored pensions and are hired in an advisory capacity. The UK has a strong government actuarial team with an agency dedicated to providing expert services.
A government actuary is a person trained in actuarial science who works for a government agency or office. The primary job of a government actuary is to perform risk analysis and generate statistical reports that can be used to develop official financial strategies. Government actuaries are relatively rare 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 relies on statistics and probability, and is concerned with predicting a large number of financial and investment figures. Insurance companies commonly hire people with this type of training, which helps set premium amounts based on a person’s age, driving record and location, among other things. In the government sector, actuaries generally work with pension payments and social welfare distribution. 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 tries to balance risks.
Most governments hire actuaries in an advisory capacity. Their main job is to perform complex calculations and make recommendations to senior leaders. However, hiring full-time actuarial staff is often expensive, and governments may outsource work to companies and private consulting agencies regarded as experts in the field. This is often seen as saving money and time, particularly in situations where actuarial calculations do not generate daily or year-round work.
In a sense, any actuary who works for the government, even by contract, can be referred to as a “government actuary.” Usually, however, the term is reserved for actual government employees. Most governments hire senior actuarial staff to handle high-level risk analysis for a variety of different transactions. This work is often very 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 an elite position.
Government actuaries in the UK are an exception. The UK has one of the strongest government actuarial teams of any country. There, there is an entire agency, the “Government Actuary Department”, with the sole function of providing expert actuarial services to all branches and divisions of the government. A government actuary in the UK may work on pension predictions, financial outlooks, investment risk and risk tolerance, and inter-agency insurance needs. Actuaries are frequently recruited directly out of school at this agency, and generally find many opportunities for professional growth and development over time.
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