The Association of Canadian Pension Management (ACPM) says a new funding model must be developed to preserve single-employer DB plans.
“The ACPM is concerned about DB pension plans disappearing from the landscape,” said Ian Edelist, member of the ACPM’s national policy committee and a principal at Eckler Ltd., on Friday at an ACPM Ontario regional council event in Toronto.
He added that, when funding rules were created in the 1980s, the stock market was doing well, the economy was growing, interest rates were higher, and people didn’t live as long.
At the event, Edelist discussed the ACPM’s newly launched discussion paper that proposes a new funding model that would replace the existing solvency and going-concern requirements with a new single funding standard.
Key features of the new standard would include a new discount rate, provisions for adverse deviations, changed amortization periods, limits on benefit improvements and portability status based on a plan’s funding level.
“This should apply across Canada,” Edelist said. “It’s hard to have different funding models across different jurisdictions for plan sponsors that have plan members in multiple jurisdictions.”
The ACPM will hold regional sessions on the topic in Vancouver and Winnipeg on Tuesday and Wednesday, respectively.
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