British Columbia is amending the definition of provision for adverse deviation for pension plans in the province with a target-benefit provision. The changes to PfAD’s definition, which will come into effect on Dec. 31, 2022, reflects recommendations from the B.C. Financial Services Authority to the Ministry of Finance. The amendments will lower the minimum funding […]
The Pension Investment Association of Canada is providing feedback on the Alberta government’s consultation draft of potential legislative and policy updates for private sector pension laws. While the PIAC doesn’t have specific views on how to calculate the provision for adverse deviation, it’s encouraged Alberta is considering a harmonized approach, wrote Sean Hewitt, chair of […]
As the move away from traditional defined benefit plans continues and intensifies, Canada’s multi-employer pension plans are providing employers with another retirement savings option for their employees. And despite facing a number of challenges, from industries in decline to legislative obstacles, MEPPs continue to attract plan sponsors from across the country. Read: Canadian MEPPs facing challenges […]
Manitoba is amending its pension regulatory system in order to strengthen the province’s pension regulatory and solvency framework. The changes, which took effect on Dec. 20, 2021, establish new rules for the funding of private sector defined benefit pension plans, including reducing the solvency deficiency threshold at which special payments must be made from 100 […]
With defined benefit pension solvency reforms gradually coming in across the country, two experts debate whether there’s a better way to ensure DB plan sustainability and security. Todd Saulnier, vice-president, the Association of Canadian Pension Management’s board of directors The answer is mostly yes. A floor of 85 per cent of solvency liability might be […]
Defined benefit plan sponsors can’t predict the future — but with a provision for adverse deviation, they can at least plan for it. “Given the work that actuaries do, where it’s all about quantifying risks and all these unknowns, it’s always best to be conservative,” says Andrew Gillies, partner and consultant at Robertson, Eadie & […]
Long before the global pandemic, jurisdictions across Canada were embarking on pension solvency reform, with some moving from strict 100 per cent solvency funding requirements to going-concern plus models, which incorporate a funding cushion. Low interest rates, which make solvency funding very expensive, have been a key driver pushing the going-concern plus model, says Dean […]
While the Pension Investment Association of Canada is generally supportive of British Columbia’s proposed solvency funding framework, when it comes to requirements around funding the provision for adverse deviations, the organization is suggesting B.C. takes a page from Ontario and Quebec. With many governments across Canada looking to make defined benefit plans more sustainable, the […]
In Ontario’s new defined benefit plan funding rules, the provisions for adverse deviation should be based on the plan’s asset mix, and a riskier asset mix should naturally require a higher PfAD, according to the Association of Canadian Pension Management’s submission to the provincial Ministry of Finance. “Using that logic and an understanding that fixed-income […]