The Canadian Institute of Actuaries (CIA) announced last week that the new effective date for the changes in determining pension commuted values has been changed to February 1, 2005. Affected by the move are:
- the determination of transfer values to those who leave a pension plan’s coverage
- solvency calculations for funding and plan terminations.
“Most plan sponsors will want to know whether the 2004 standard will increase or decrease transfer values and funding costs,” consultant The Segal Company wrote in its report about the CIA’s move. “Overall CIA studies indicate that, under today’s market conditions, there will be relatively little difference for the plans that have no automatic indexing and perhaps some reduction for plans that have indexing.”
Segal said implementation of the new rules would lead to greater volatility in plan calculations as well as bringing more complex plan administration.
Text of the rule is at http://www.actuaries.ca/publications/2004/204007e.pdf . The group’s news release about the implementation delay is here .