Consistency Test And Improvement Of Actuarial Assumptions Of PROST

PROST (Pension Reform Options Simulation Tool-kit) is a generic, computer-based forecasting model, which was developed by Department of Social Security, The World Bank. Based on demographic situations, age structures, macroeconomic situations and other statistical information, it could simulate future structure of population, pension payments and implicit debt of the next 75 years, and also provide reference for pension policy design. Now PROST is used in many countries, but it has been in Lack of necessary upgrades for a long time. This paper considers the rationality and consistency of actuarial assumptions of PROST, intended to improve the accuracy and applicability of this model.This paper first adopts the view of Total Data Quality Management, and tests the consistency of actuarial assumptions of PROST using TDQM, then points out and improves the inconsistent assumptions. The thesis improves the mortality table assumption, amends the assumption of retired population, wage and contribution. Before improving the mortality table, the paper analyzes and compares 5 different graduation methods, and finally chooses spline graduation because of its accuracy and applicability. At the end of this article, PROST is evaluated as a software using the view of quality control.The thesis stresses the importance of data quality management. I hope this thesis could dedicate to the upgrade of PROST in the future.