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Actuaries weigh in on solvency funding, target-benefit plans in N.S. pension consultation

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Greg Heise:

Let’s be careful not to leave the impression that Alberta and B.C. have “loosened solvency rules”. Yes, for target benefit provisions, solvency does not apply. But for the significant number of single employer defined benefit plans in the West, their position is no different than it has been over the past decade or so – patchwork, “temporary” solvency relief. No meaningful change has come about for this important sector.

Friday, January 12 at 7:17 pm | Reply

Charles Spina:

Smart regulators, those British Columbians and Albertans.

Most employers would welcome solvency reserves; anything to mitigate the cash liability volatility that many of them now face. After all, CFRs have been a fixture of the mid-large case group benefits world for more than 40 years.

So-called “target” benefits plans are a bad idea, but if that is what it takes to slow the rate of DB conversions, so be it. That being the case, the word “target” should be banned, given it implies some sort of guarantee to the average person. Best to call them what they really are: Variable Accrual Pension Plans or VAPPs.

Tuesday, January 16 at 11:53 am | Reply

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