We will walk you through the process for actuarial valuation and the data that is required to be submitted by a reporting entity. We require the details of the plan members of a reporting entity, such as employees participating in the plan, their particulars such as age, last drawn salary, years of experience etc. You can go through the individual data requirements for valuation of particular types of employee benefit schemes such as gratuity, leave etc. 


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A company performing actuarial valuation for the first time has to do valuation for 2 years as per the audit requirements. This is because the actuarial valuation report is like a balance sheet with assets and liabilities rolling over from the previous year. Please see our note on 2 year valuation requirement.  


To begin evaluation, let us look at the data that is required from a company's end for different employee benefit schemes. 


Data Requirements for gratuity valuation:

For gratuity valuation, the following information is required from a reporting entity: 

  1. List of all the employees of the company, along with their salary, date of birth and date of joining. 
  2. If you have any plans with insurance companies, the fund statement of the plan is required. 
  3. Previous year's valuation reports are also required. 
  4. If previous year's valuation report is not available, the same has to be completed first. Hence, all the employee's data for the previous year should also be provided, if the valuation was not done for the previous year. This requirement is waived off incase the company was incorporated in the current FY. 
  5. If any of the assumptions such as attrition rate or salary escalation rate are to be used as per auditor's requirements, the same is also to be intimated to us. 


 

Data Requirements for leave valuation: 

For leave valuation, the following information is required from a reporting entity:

  1. List of all the employees of the company, along with their salary, date of birth and date of joining. 
  2. Opening and closing leave balances for all the employees, in order to ascertain the number of leaves availed. 
  3. Past year's valuation reports, or if a company is doing the valuation for the first time then 2 year's valuation should be done ideally. 
  4. The leave policy of the company.
  5. Similar to gratuity valuation, last year's report is required for leave valuation as well. 


Next Steps After Data Submission

Once the data is provided, we will analyse the data to ensure that all the particulars is provided. Once the data is assessed, the next step is to finalise the actuarial assumptions. This includes particulars about the company's employee demographics, like salary growth rate, attrition rate etc. 


Once the data is found to be complete and the assumptions are finalised, we will begin the valuation process to ascertain the liabilities. The valuation for defined benefit plans is carried out using Projected Unit Credit Method, where the estimated obligations are calculated for each future year, and the accrued to estimate the obligations. The final obligations are discounted to find the present day value of the employee benefits. In the next step, the disclosures are provided and we will share the reports once they are ready. For an overview of all disclosures as per Ind AS 19 for every type of employee benefit scheme, please see our article on Accounting under Ind AS 19.



Download the Data Formats

The data formats required for actuarial valuation various benefit schemes can be downloaded from here:


Data Format for Gratuity and Leave Valuation : This section includes the data format for defined benefits obligation plans such as gratuity, earned leave/privileged leave and sick leave.


Data Format for Pension Valuation: This section includes the data format for pensions valuation.


Data Format for ESOP Valuation : This section includes the data format for ESOP Valuation