Actuarial valuations: points to consider

Below are a few points to consider with regard to actuarial valuations. The Supplemental Pension Plans Act remains the key resource to ensure an actuarial valuation is in conformity with all requirements.

Key considerations

Interest rates on a solvency basis

The interest rate used to discount the amortization payments on a solvency basis must be prorated to the following, according to their respective liabilities:

• the interest rate for retired members (uninsured pensions);
• the interest rate for the other members.

Actuarial Information Summary

Reports concerned

The actuary who signs the actuarial valuation report must complete the Actuarial Information Summary and sign the declaration it contains in the following cases:

• The actuarial valuation is after 14 December 2009.
• The actuarial valuation is after 30 December 2008 in the case of pension plans for municipal and university sectors, as well as for the plan for early childhood centres (CPEs) and accredited private daycares in Québec.
• The actuarial valuation is after 30 December 2009 in the case of the pension plan for emergency medical technicians in Québec.

The Régie's specifications

The Régie gives guidance on certain lines of the Actuarial Information Summary as a complement to the instructions given on the form.

Partial actuarial valuation

Where the Actuarial Information Summary is related to a partial actuarial valuation, the actuary must fill out lines 001 to 014a, 185 to 190, 201, 204, and part VII of the summary.

In the case of pension plans for municipal and university sectors, as well as for the plan for early childhood centres (CPEs) or accredited private daycares in Québec, the actuary must fill out lines 196 and 198 of the summary instead of lines 201 and 204.

Temporary relief measures for private sector pension plans

Describing the measures used

The report on an actuarial valuation carried out under the conditions provided for in the Regulation providing temporary relief measures for the funding of solvency deficiencies must meet the following two requirements:

• It must specify which temporary relief measures are used (assets smoothing on the basis of solvency, the consolidation of certain deficits or extension of the amortization period).
• It must contain a description of the asset valuation method where the relief measure for assets smoothing on the basis of solvency is used.

Calculating element "S"

The amount referred to in the third paragraph of section 230.0.0.9 of the Supplemental Pension Plans Act  (known as element "S") no longer has to be automatically included in the actuarial valuation report. Actuaries must now calculate element "S" only where the debt determined on termination of the pension plan or the withdrawal of an employer from a multi-employer plan will not be paid into the pension fund of the plan.

Legal references

• Supplemental Pension Plans Act (sections 119, 130 and 140)
• Regulation respecting the funding of pension plans of the municipal and university sectors (section 2)
• Regulation providing temporary relief measures for the funding of solvency deficiencies (section 3, 4 and 9)