El balance actuarial como indicador de la solvencia del sistema de reparto

The aim of this work is twofold: on the one hand, to demonstrate the utility of the actuarial balance as an element of transparency, an indicator of the solvency, sustainability and financial solidity of the pay-as-you-go system and a tool capable of providing positive incentives to improve the financial management of the system, eliminating or at least reducing the traditional divergence between the planning horizon of the politicians and that of the system itself; and on the other, to make the first estimates of the actuarial balance of the Spanish contributory pension system for the old age contingency, based on official figures. To this end, we analytically explain the novel entry in the balance sheet called the “Contribution Asset”, and compare it to the “Hidden Asset”. We also provide a comparison between the official actuarial balance for the Swedish notional account system and the Spanish balance. The main finding is that the Spanish pension system shows a 31.4% insolvency ratio for 2006. Moreover, a comparison of the consecutive balance sheets for 2001-06 shows that the system has a structural actuarial disequilibrium, which means that the degree of insolvency is growing over time even though the cash-flow outcome has improved over the same period. The absence of a balance sheet in this specific case produces a “mirage effect” by hiding the presence of a capital deficit, relativising future cash deficits and, more importantly, not taking steps to reverse this trend, restore solvency and eliminate the “losses” or “increases” in the accumulated deficit which accrue every year that passes without reform. Two main suggestions for economic policy spring from this paper: the need to compile an official actuarial balance sheet and actuarial annual results so that society may be made aware of the real situation of the Spanish pension system, and the advisability of applying an automatic balancing mechanism which, would predetermine the combinations of gradual parametric adjustments needed to reverse the negative trend and set the Spanish pension system on the road to solvency in the long run.