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A government actuary is a person trained in actuarial science who is employed by a government agency or office. The main job of a government actuary is to perform risk analysis and generate statistical reports that can be used to craft official financial strategies. Government actuaries are relatively scarce in the United States, but are common in many other parts of the world, particularly in countries with government-sponsored pensions for citizens. In these places, the government actuary helps determine reasonable pension payouts, interest rates, and policy standards that balance the needs of the populace with the budget and other obligations of the government.
Actuarial science depends on statistics and probability, and concerns itself with predicting a wide number of investment and financial figures. Individuals with this sort of training are commonly hired by insurance corporations, helping to set premium amounts based on peoples’ age, driving record, and location, among other things. In the government sector, actuaries generally work with pension and social welfare distribution payments. They may also deal with government investments, particularly bonds, predicting the long-term growth of assets based on fixed factors. Bond projections are often made according to Bernoulli’s hypothesis, which deals with balancing risks.
Most governments hire actuaries in an advisory capacity. Their main job is to carry out complex calculations and make recommendations to senior leaders. Hiring full-time actuarial staffs is often costly, however, and governments may outsource work to private consulting firms and agencies regarded as experts in the field. This is often viewed as saving both money and time, particularly in situations where actuarial calculations do not generate daily or year-round work.
In some sense, any actuary who does work for the government, even if on a contract basis, can be referred to as a “government actuary.” Usually, though, the term is reserved for actual government employees. Most governments hire senior actuarial staff to handle high-level risk analysis for a variety of different transactions. This work is often very advanced and usually requires significant industry experience. Local governments and community agencies will sometimes hire more inexperienced actuaries, but in general, the job of a government actuary is something of an elite position.
Government actuaries in the United Kingdom are an exception. The UK has one of the most robust government actuarial staffs of any country. There, an entire agency — the “Government Actuary’s Department” — exists with the sole function of providing expert actuarial services to all branches and divisions of the government. A government actuary in the UK may work on pension predictions, financial outlooks, investment risk and risk tolerance, and inter-agency insurance needs. Actuaries are frequently recruited directly out of school into this agency, and they typically find many opportunities for growth and career development over time.