South African Actuarial Journal Volume 7 (2007)


Options for the development of the education and professional qualification of South Africa actuaries

Author(s):  PG Slattery and HJ Kemp
This paper investigates the various education and qualification systems available around the world for actuaries, and analyses which actuarial associations rely on their own examinations, those of other bodies, or those of universities. Particular attention is given to the Australian system, which in several ways parallels the South African situation.
The paper outlines the pros and possible cons of a local education and qualification system for the actuarial profession in South Africa. Various options currently available to the Actuarial Society of South Africa relating to a local education and qualification system are discussed. Following the withdrawal of the localised final examinations by the Faculty and Institute of Actuaries at the end of 2006, the maintenance of the current system is not an option. Key issues that will need to be addressed if changes are to be made to the South African actuarial education system are highlighted.
Keywords: Education; professional qualification; professional designation; actuaries; South Africa

Options for the development of the education and professional qualification (pdf) 


The potential effect of an HIV/AIDS vaccine in South Africa

Author(s):  LF Johnson and RE Dorrington
This paper presents a model for assessing the potential effect of an HIV/AIDS vaccine in South Africa, and for calculating the amount of vaccine that would be required. A number of different hypothetical vaccine profiles and vaccine distribution strategies are considered. Results suggest that a sterilising vaccine could reduce the HIV incidence between 2015 and 2025 by up to 50%, while a disease-modifying vaccine would be unlikely to reduce HIV incidence by more than a third. The effect on AIDS mortality over the same period would be substantially smaller, and it is unlikely that any preventive vaccine would reduce AIDS mortality by more than 10% between 2015 and 2025.
Keywords: HIV/AIDS; vaccine; model; South Africa

The potential effect of an HIV AIDS vaccine (pdf)


Pension benefit design: flexibility and the integration of insurance over the life cycle

Author(s): A Asher
It is suggested that South African retirement schemes ought to be designed around the financial life cycle and the risks faced by the families of members at various stages of the cycle. This paper reviews what we know about the life cycle and the non-investment risks: principally death, disability, dismissal and divorce. Providing for death and disability within schemes would allow for an offset of these costs against that of retirement, for less in the way of underwriting and for economies of scope. It would also allow for the elimination of those statutory and private schemes that give partial cover for accidental causes of death and disability. The paper also criticises insurance arrangements that conflate the heterogeneous causes of disability. It then considers arguments for making scheme membership and various elements of design a legislative requirement. Against the common view, it is suggested that a relatively low level of saving should be required, but that life and disability cover ought to be compulsory as should annuitisation at retirement.
Keywords: Policy; pension funds; collective action; life insurance; annuitisation; disability; retirement; social policy

Pension benefit design (pdf)


Poverty and inequality in South Africa and the world

Author(s): P Govender, N Kambaran, N Patchett, A Ruddle, G Torr and N van Zyl
This article begins with a discussion of various definitions and concepts of poverty and inequality. It then distinguishes between objective and subjective concepts of poverty, temporary versus chronic poverty, and absolute versus relative poverty. The concept of inequality is discussed and compared with that of poverty. Specific measures of poverty and inequality are considered next.
The measurement of poverty requires the choice of a welfare measure, a benchmark welfare level for identifying those in poverty (a poverty line), and the selection of one or more appropriate poverty indicators. The mathematically desirable features of a poverty or inequality measure are discussed, and the most commonly used measures are described. Some of the special considerations that arise when measuring poverty and inequality at the world level are then investigated, and this is followed by a discussion of the datasets available for producing these.
Finally, actual estimates of poverty and inequality in South Africa and the world are examined, with a particular focus on trying to assess the trend in recent years. It seems fairly certain that the proportion of people in the world living in absolute poverty has declined significantly and consistently over the last few decades, and this trend is continuing. There is less agreement about trends in inequality. Progress against poverty has been very uneven across regions: there have been dramatic declines in Asia, but the situation in Africa has worsened. There is an ongoing debate about poverty and inequality trends in South Africa.
Keywords: Poverty; inequality; South Africa; world

Poverty and inequality in South Africa and the world (pdf)


South African annuitant standard mortality tables 1996–2000 (SAIML98 AND SAIFL98)

Author(s): RE Dorrington and S Tootla
This paper describes the data and the processes used to produce the first standard tables of mortality of South African immediate annuitants. A parametric curve was fitted to the data from the normal retirement ages up to age 85. Below the normal retirement ages the rates increasingly reflected the impact of higher mortality due to ill-health retirements and so the curve was blended into that of the most recent standard table of life-assured mortality (SA85–90). Above age 85 the estimates were thought to be unreliable and the extrapolation of the curve fit to the younger ages did not allow for the expected fall in the rate of increase in the rates with age. Thus rates above this age were estimated using a relationship proposed by Coale and Kisker. It was not possible to produce select rates or to decide on a trend in these rates over time.
Keywords: South Africa; annuitant; mortality; standard table

South African annuitant standard mortality tables (pdf)


Editorial: Geographical focus: An outmoded idea?


SAAJ Volume 7 Editorial (pdf)

The views and opinions expressed in this journal are, unless otherwise stated, those of the authors. Editorial opinion or comment is, unless otherwise stated, that of the Editor and publication thereof does not indicate the agreement of the Actuarial Society of South Africa.

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ISSN-8: 1680-2179
ISSN-13: 977-1680-2170-02