In May 2021, the Canadian Association of Pension Supervisory
Authorities (CAPSA) released updated Guideline No. 7, Pension Plan Funding Policy
Guideline. CAPSA was engaged in a consultation process in the
fall of 2020 and the updated Guideline is the result of that
consultation process.
The updated Guideline No. 7 maintains the useful and clear
guidance on pension plan funding policies (including format,
content and specific issues such as use of funding excess).
However, the updated guideline also contains provisions that relate
specifically to target benefit plans. Guideline No. 7 reflects the
unique challenge for target benefit plans in which benefit
reductions are possible if funding objectives are not met.
