Régie Des Rentes Releases Unfavourable Position On Margins For Adverse Deviations

Effective December 31, 2010, revisions were made by the Canadian Institute of Actuaries (CIA) to its Standards of Practice – Practice-Specific Standards for Pension Plans. In particular, the revised CIA Standards of Practice now provide that assumptions for going concern valuations are either best estimates or best estimates modified to incorporate margins for adverse deviations (i.e., an adjustment to an actuarial assumption to reflect the uncertainty in the variable) to the extent required by law or the terms of engagement.

In a recent newsletter, however, the Régie des rentes du Québec expressed the view that since pension committees of defined benefit plans registered in Québec are responsible for determining the terms of engagement of plan actuaries, they should be the ones providing instructions regarding the inclusion of margins for adverse deviations. The Régie reminded pension committees and their agents (e.g., employers with the delegated authority to