The purpose of requiring certified pension actuary’s verification is to confirm that each corporate pension plan is operated pursuant to appropriate pension actuarial principles in order to secure participants’ benefits.
Role of Certified Pension Actuary
- The Certified Pension Actuary (CPA) requirement was introduced in 1988, by the amendment of the Employees' Pension Insurance Act, for the purpose of sustaining the financial soundness of Employees’ Pension Funds. It was also introduced to National Pension Funds in 1991 and to Defined Benefit Corporate Pension Plans in 2002.
- CPAs have a role to verify if actuarial reports submitted to the Minister of Health, Labor and Welfare by Employees’ Pension Funds, National Pension Funds, and Defined Benefit Corporate Pension Plans are prepared based on the appropriate pension actuarial principles, and to sign off and stamp them with a seal.
- In particular, the regulation requires each Employees’ Pension Fund to appoint a specific CPA, who not only verifies the actuarial reports above, but also assesses the funded status quarterly, and gives advices on the funding management on a continuous basis.
Requirements to become a Certified Pension Actuary
To become a CPA, it is required to meet the following four criteria and then to be authorized by the Minister of Health, Labor and Welfare.
- Knowledge and skills: Pass all the examinations conducted by the Japanese Society of Certified Pension Actuaries or the Institute of Actuaries of Japan.
- Work experience: Have five or more years of experience in pension actuarial services.
- Experience as a person in charge:
Have two or more years of experience as a person in charge of pension actuarial services.
- Have sufficient social credibility.