The Canadian Institute of Actuaries (CIA) has stated that revised standards for pension plan commuted values will come into effect December 1, 2020. On that date, the calculation used by administrators will change.
This change was mentioned in their latest memo as of July 20, 2020.
This will likely result in lower commuted value amounts on or after December 1st 2020, therefore reducing the possibility of receiving a cash surplus.
Furthermore, this makes it more difficult for insurance companies to match copycat annuities.
If you are retiring soon and planning to take the commuted value, we highly recommend doing so by November 1, 2020. Contact us to assess your options at 1-888-554-6661.
The revisions affect Section 3500 of its Standards of Practice, which is used when determining commuted values for pension plans.
These revisions were originally scheduled to go into place on August 1, 2020, but the Actuarial Standards Board (ASB) announced by in April that the date would be postponed, but the new date was unclear. We now know that it is December 1, 2020.
The Canadian Institute of Actuaries is the national, bilingual organization and voice of the actuarial profession in Canada.