CIA Pension Seminar Alberta Superintendent

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CIA Pension Seminar Alberta Superintendent

• Ellen Nygaard
• Deputy Superintendent of Pensions, Alberta
• Toronto, Ontario
• April 16, 2007

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Today Ill talk about

• Funded and solvency status of Alberta registered
  plans
• Evolving government policies on minimum funding
  standards
• The PPFRCs Statement of Principles document
  (March 2005)

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Funded Status, AB Plans
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Solvency Status, AB Plans
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Solvency Ratios 2006
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Solvency Ratios 2007
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AB Legislative Developments

• Temporary (3-year) solvency moratorium for
  SMEPPs, effective August 2006
• To be approved, Plans must
• Pay off all going-concern unfunded liabilities
  over 10 years or less
• Make no benefit improvements
• Continue to report solvency position

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AB Legislative Developments

• Letters of Credit regulation to be passed
• Can cover up to 100 of solvency deficiency
• Letter of Credit must be
• Issued by a Scheduled Bank
• Irrevocable
• Callable by fund holder

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Funding Rules Basic Questions

• What is an accurate measure of liabilities?
• What is an accurate measure of sensitivity to
  adverse events?
• If benefits are not secure, what steps will be
  required to rectify the situation
• In particular, how long will plan sponsors have
  to make adjustments?

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Many Pension Deals

• Classic single-employer DB
• Multi-Unit DB plan
• DC plan
• Negotiated contribution DB
• Shared-cost DB plan
• Is Quebecs MFPP another type?

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Funding rules and different deals

• Standards should aim at
• Establishing true picture of funded status and
  costs
• Timing and method of paying off deficiencies
• The deal dictates who bears the costs and how
• Rules have been written with standard
  single-employer DB plan in mind one size does
  not fit all

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Harmonization will it happen?

• CAPSA unable to get consensus from stakeholders
  on funding and surplus rules
• Jurisdictions left to deal with issue in their
  own ways and are starting to do so
• Often, harmonization develops over time

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• Thank you for listening Questions?

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PPFRC Statement of Principles(March 2005
document)

• We like emphasis on wind-up status as it fits
  regulator emphasis on benefit security
• We like the idea of estimating annual incremental
  cost on wind-up basis
• Not ready to abandon standards for going concern
  valuations due to goal of stable systematic
  funding
• Best estimates should be actuarys call
• Explicit PfADs preferable to implicit
  conservatism