Recommended assumption set (baseline, as verified August 16, 2026)
| Assumption | Baseline value | Derivation & defense | Public source |
|---|---|---|---|
| Discount rate (IAS 19 ¶83) | 4.45% (curve: 4.28% at 11y · 4.49% at 16y · 4.63% at 25y, as of 7/31/2026) |
Yield on high-quality euro corporate bonds (AA), matched to the plan's liability duration. Our engine measures the duration (Valuation Lab shows ~23 years for the demo plan); the rate is then read off the published curve, not hand-picked. | Lurse monthly IFRS rates; cross-checked against the Mercer Yield Curve at engagement |
| Inflation / health index | 2.9% (2026-27 forecast average) | Belgian health index is the statutory driver of wage and benefit indexation. We use the Federal Planning Bureau's official forecast, updated monthly, rather than a house view. | Federal Planning Bureau, 7/7/2026 |
| General salary growth | 3.6% = indexation 2.9% + merit/step ~0.7% | Belgian automatic wage indexation (pivot index crossed June 2026; next crossings forecast Jan and Dec 2027) plus the post's Local Compensation Plan step and merit structure. The merit component is calibrated to actual LCP practice at award. | FPB pivot forecasts; LCP structure (plan documents at award) |
| Mortality | IA|BE 2020 prospective tables, sex-specific | The Belgian actuarial institute's standard, generational (longevity-improving) and sex-specific, satisfying the RFQ's request for mortality by gender. The Valuation Lab demonstrates the sensitivity of moving from a period to a prospective basis. | IA|BE 2020 tables and methodology |
| Retirement age | 66 now; 67 from 1/1/2030 (modeled by cohort) | Statutory schedule under the 2015 reforms; supplementary-plan ages aligned by the Law of 18 Dec 2015. Applied cohort-by-cohort, not as a single flat age; early-retirement career conditions (60/44y, 61/43y, 63/42y) tested against the census. | AKD; etui |
| Guaranteed return (WAP Art. 24) | 2.50% from 1/1/2025 (1.75% for 2016-2024 generations) | Statutory formula: 85% of the 24-month average 10-year OLO yield, rounded to 25bp, floor 1.75% and cap 3.75%. Applied by contribution generation under the plan's method (vertical vs horizontal), which the Conformity Audit module tracks explicitly. | Vanbreda; AG Insurance |
| Exchange rate (USD/EUR) | Treasury reporting rate at valuation date; forwards for sensitivity | The Embassy budgets in dollars while liabilities are euro-denominated. We report in EUR per the contract and provide a USD budget bridge with FX sensitivity, per the RFQ's assumption list. | Treasury Reporting Rates of Exchange |
| Withdrawal / turnover | Age-graded, light (0-3%) | Embassy LE-staff populations are long-tenured. Set from the plan's own movement data at award; the demo uses a conservative age-graded scale and the report discloses the experience basis. | Plan movement data (at award) |
How the approval workflow runs
1. Assumption memo, day 10
Each recommended assumption with derivation, source, and the alternatives considered, in the format above. Delivered to the CORs, Management Counselor, and CGFS Comptroller per Task (a).
2. Review meeting
We present the memo, walk the sensitivity of each contested assumption live in the Valuation Lab, and record CGFS's determinations. Where our recommendation is not adopted, the report discloses both bases, as the Survey Report guidelines require.
3. Locked basis
The approved set is frozen in the valuation file with a hash-stamped run log. Every figure in the draft report traces to that locked basis.
Note. Baseline values above are market data as of their cited dates and will be refreshed to the valuation date at engagement. They are recommendations for review, not conclusions about the Embassy plan.