Follow up to the D'Amours report on Pension Plan Reform in Québec and New Assumptions Proposed for Actuarial Valuations

These are among the subjects included in the current issue of the Morneau Shepell News & Views, a monthly publication dedicated to providing insights to its clients in Canada.

TORONTO, Sept. 26, 2013 /CNW/ - Morneau Shepell, in the current issue of its newsletter, News & Views, reports on the findings of the Quebec Committee on Public Finance after its public consultation on the D'Amours report released in April 2013.

• FOLLOW-UP TO THE D'AMOURS REPORT ON PENSION PLAN REFORM IN QUÉBEC - The Québec Committee on Public Finance said that it supports the objectives and values of the report, but that most of the D'Amours recommendations require further study.
• NEW MORTALITY TABLES WILL AFFECT FUNDING OF PENSION PLANS -The Canadian Institute of Actuaries published a draft report on Canadian Pensions Mortality which concludes that Canadians covered by defined benefit pension plans are living longer, leading to higher plan contributions.
• CHANGES TO ACTUARIAL GUIDANCE FOR SOLVENCY VALUATIONS: NEW ANNUITY PROXY AND ALTERNATIVE SETTLEMENT METHODS -The Canadian Institute of Actuaries has refined the guidance that actuaries use for estimating defined benefit pension liabilities for solvency and wind-up valuations, where it is assumed that life annuities will be purchased to settle pension obligations, leading in most cases to higher plan contributions.
• NEW TRANSFER LIMITS WHEN PENSIONS ARE REDUCED -The Department of Finance Canada issued a comfort letter concerning subsection 8517(3) of the Income Tax Regulations, allowing greater sums to be tax-sheltered in certain cases.
• MARKET INDICES - Monthly summary of returns from various market indices such as the TSX Group / PC Bond Indices and Canadian, U.S. and Foreign Equity Indices. Also includes returns from benchmark portfolios used by pension funds.
• TRACKING THE FUNDED STATUS OF DEFINED BENEFIT PENSION PLANS - Impact of past returns on plan assets and the effect of interest rate changes on solvency liabilities.
• IMPACT ON PENSION EXPENSE UNDER INTERNATIONAL ACCOUNTING - Expense impact for a typical defined benefit pension plan.

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