Canadian Institute of Actuaries announces delay in new commuted value standard

On July 26, 2018, the Canadian Institute of Actuaries (CIA) announced a delay in its new commuted value standard. The CIA stated that the earliest possible implementation date is sometime in the second calendar quarter of 2019.

The CIA noted a move towards increased focus on the long-term sustainability of defined benefit pension arrangements with less emphasis on shortterm benefit security (i.e., solvency funding). This move poses many challenges in defining what may be a fair transfer value for terminating pension plan members while at the same time taking into account the risk to remaining plan members and other stakeholders.

Based on a review of the over 30 responses received to the initial draft proposals, the CIA working group will submit a revised draft to the Actuarial Standards Board for review. It is expected that the nature of the changes proposed will require additional consultations among CIA members.


Comment

The delay in implementing a revised standard for calculating commuted values will be a disappointment to pension plan administrators who are hoping for reduced commuted value payouts under the new standard. We will continue to keep you updated with new developments.


News & Views - September 2018 (PDF)