Alberta Clarifies Alternative Settlement Methods for DB Plan Administrators

On November 12, 2013, the Alberta government issued EPPA Update 13-01, in response to recent developments in the actuarial profession affecting defined benefit pension (DB) plans. The EPPA Update will be of interest to administrators of DB plans registered in the province of Alberta, particularly those which provide post-retirement increases to pensioners that are fully or partially indexed to the Consumer Price Index.

Specifically, in September 2013, the Canadian Institute of Actuaries published an Educational Note – Alternative Settlement Methods for Hypothetical Wind-Up and Solvency Valuations providing guidance to actuaries who decide to use an alternative settlement method as described in that educational note. The educational note further elaborates on an earlier educational note applicable to valuations with effective dates between June 30, 2013 and December 30, 2013.