Actuarial balance sheets as a tool to assess the sustainability of social security pension systems

The choice of the methodology used to produce a social security pension system's balance sheet is mainly determined by the system's financing approach. In this article, it is shown using the example of the C anada P ension P lan that if the assessment of the financial sustainability of a pay‐as‐you‐go or partially funded system is done through the means of an actuarial balance sheet, then the methodology used should take into account future contributions of current and future participants. The balance sheets produced using the open group approach, as well as methodologies used in U nited S tates and S weden, are discussed.