Amendments to Section 3500 of Practice-Specific Standards for Pension Plans of the CIA/Pension Commuted Values

Amendments made to Section 3500 were published on January 24. Since they will have direct impacts on the day-to-day administration of pension plans, the CIA will have the changes come into force on August 1, 2020. The CIA’s intention is to give administrators sufficient time to adjust their systems in order to be in compliance with new calculation methods and to add the required disclosures.

The following is a summary of the revisions to the assumptions used in the calculation of pension commuted values:

Other changes were also made, such as:

• A period of 9 months before a recomputation is required (if no period has been established by the terms of the plan, applicable legislation or the plan administrator)
• Adjustments to the methodology to round the interest rates and the implicit inflation rates
• Details of disclosures to be made to pension members

The changes made to the commuted values’ computations will also impact the plans’ solvency. Impacts on funding, meanwhile, will vary with applicable legislation.

A subsection dealing exclusively with target benefit plans was added to Section 3500. The early adoption of this subsection is permitted under certain conditions.

It should be noted that some provinces or territories might need to adjust their legislation in order to allow the use of the revised standard.

Would you like to receive a summary of the impact on your pension plan? Our experts are here for you. Contact your Normandin Beaudry advisor or email us.