Régie des rentes du Québec

Actuarial deficiencies

Note that...
  • The rules regarding pension plans of the university sector also apply to pension plans for Québec emergency medical technicians and early childhood centres (CPEs) and accredited private daycares in Québec.
  • Different rules can apply to pension plans covered by a special regulation.

Solvency deficiencies

Private sector pension plans

There are two types of solvency deficiencies: technical deficiencies and improvement unfunded liabilities.

Technical deficiency = Liabilitiessolv − Wsolv − (Assetssolv + CV(Csolv))

Improvement unfunded liability = Wsolv − (Spec + Xsolv)

where Liabilitiessolv = the liabilities determined on a solvency basis

Wsolv = the value, on a solvency basis, of the additional obligations resulting from amendments considered for the first time

Assetssolv = the assets determined on a solvency basis

CV(Csolv) = the commuted value of the amortization payments for solvency deficiencies determined before the valuation date and not eliminated on that date

Spec = the special amortization payments established on the valuation date

Xsolv = the surplus assets, on a solvency basis, used to fund the amendment


Pension plans in the municipal and university sectors

The actuary does not have to calculate the solvency deficiency. However, the plan's financial situation on a solvency basis must be indicated in the actuarial valuation report.

Funding deficiencies

Private sector pension plans

There is only one type of funding deficiency, which is calculated as follows:

Funding deficiency = Max {0; Liabilitiesfun – Wfun – Assetsfun} + Wfun –Xfun


where Liabilitiesfun = the liabilities determined on an on-going basis

Wfun = the value, on an on-going basis, of the additional obligations resulting from amendments considered for the first time

Assetsfun = the assets determined on an on-going basis

Xfun = the surplus assets, on an on-going basis, used to fund the amendment


Pension plans in the municipal and university sectors

There are two types of funding deficiencies: technical deficiencies and improvement unfunded liabilities.

Technical deficiency = Liabilitiesfun – Wfun – (GA + CV (Cfun))

Improvement unfunded liability = Max {0; Wfun – Spec} – Xfun


where Liabilitiesfun = the liabilities determined on an on-going basis

Wfun = the value, on an on-going basis, of the additional obligations resulting from amendments considered for the first time

GA = the value of the general account

CV (Cfun) the commuted value of the amortization payments for funding deficiencies (technical deficiencies or improvement unfunded liabilities) determined before the valuation date and not eliminated on that date

Spec = the special amortization payments established on the valuation date

Xfun = the surplus assets, on an on-going basis, used to fund the amendment

With the exception of pension plans in the municipal sector to which special rules apply for eliminating certain technical deficiencies, complete actuarial valuations after 30 December 2011 may only present one technical deficiency.

Legal references

Note that...

A municipal sector pension plan is a plan where the employer is a municipality, a body referred to in section 18 of the Act respecting the Pension Plan of Elected Municipal Officers or a municipal housing bureau.

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