The new standard of practice for determining the pension commuted valuesLinkedIn
There, in black and white
Bulletin NB Vol. 7 N. 10, June 2004
In February 2004, we informed you that the Canadian Institute of Actuaries (CIA) approved a new standard of practice for determining the pension commuted values payable under a registered pension plan upon termination of participation. The new standard of practice was supposed to take effect on September 1, 2004. The effective date of the standard was delayed by the CIA Board of Directors following a review process that took place recently. On June 15, 2004, the CIA Board of Directors reconfirmed the standard with an effective date of February 1, 2005.
The new standard of practice must be applied to termination of participation calculations and to solvency valuations as of February 1, 2005, subject to an amendment to pension plan legislation, if necessary. Quebec, Ontario and New-Brunswick legislations have indeed to be amended to allow application of the new standard. This makes it important to quickly measure the extent of the variations noted with respect to your pension plan.
As mentioned in our February 2004 bulletin, it is also important to review the wording of your pension plan text for any reference to the September 1993 standard of practice, in which case the text should be amended. Finally, in terms of plan administration, it will be important to communicate efficiently with members concerning possible variations in transfer values, especially following the addition of these values on annual statements as a result of changes made to the Quebec's Supplemental Pension Plans Act in 2001.
Please feel free to contact us for additional information.
630, René-Lévesque Blvd. West, 30th floor
Montreal, Quebec, H3B 1S6