Federal pension plans: Main regulatory changes to watch
The federal government has recently introduced several regulatory changes that will have a direct impact on pension plans under its jurisdiction.
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Update of mortality assumptions for commuted value calculations (Section 3530)
On May 6, 2026, the Canadian Institute of Actuaries (CIA) published an initial communication on the updated mortality assumptions used for calculating the commuted value of pension benefits for defined benefit pension plans, in accordance with Section 3530 of the Standards of Practice.
The Actuarial Standards Board proposes to promulgate the use of the combined 2024 Canadian Pensioner Mortality Table (CPM2024), along with the new MI-2024 mortality improvement scale, to replace the CPM2014 table and the CPM-B scale currently in use. This update is based on recent research supported by larger, more representative data on Canadian pension plans and more robust statistical techniques.
Consult our previous communication on the 2024 Canadian Pensioner Mortality Research Project (CPM2024).
The proposed new mortality basis, intended to maintain a consistent and administratively simple approach for all pension plans, could result in higher commuted values, and consequently, amounts payable, of around 2% to 4% for non-indexed pensions and 3% to 6% for indexed pensions, depending on age.
EFFECTIVE DATE AND IMPACT ON PLAN ADMINISTRATORS
The initial communication is a call for comments, with a deadline set for July 15, 2026. The final communication is scheduled for October 1, 2026, and the proposed effective date of the new mortality basis is February 1, 2027, to give plan administrators sufficient time to modify and test their systems.
However, these changes should be easier to integrate than when the CPM-B improvement scale was introduced, as systems had to be modified at that time to support a two-dimensional scale.
Beyond commuted value calculations, further discussion and thoughts are expected in the coming months regarding the mortality assumptions to be applied for funding and accounting valuations. In this regard, on April 21, the CIA published a revised version of its educational note on the selection of mortality assumptions for actuarial valuations.
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