Actuarial Liabilities and their impact on the Balance Sheet of the Federal Government

Abstract

The continuous growth of the social security expenditure has been worrying the Federal
Government, especially because of the spending cap established by the New Tax Regime.
In this context, the definition of the social security liabilities of the special social security
scheme (Regime Próprio de Previdência Social - RPPS), with respect to the federal public
servants, becomes essential for taking necessary measures for the long-term solvency of this
scheme. Bearing in mind that the result of the actuarial evaluations of this RPPS has given
support to the registration of the mathematical social security provision (Provisão Matemática
Previdenciária - PMP) in the Federal Government’s General Balance Sheet, this study intends
to analyze the elements that compose the social security liabilities, and the accounting aspects
that have underpinned the registration of this provision. The results found allowed to verify the
obstacles faced, specifically in relation to the database, to perform the actuarial evaluation of
the RPPS. Thus, this paper proposes two alternatives for the improvement of accounting data: a
reclassification of part of the PMP in the contingent liabilities or a change in the actuarial costing
method to allow future benefits to be fairly accounted for.