How does the actuary determine the pension obligations?
A The actuary must consider several factors including the demographic composition of Plan members (e.g., average age, longevity and marital status), the retirement experience of Plan members (e.g., the rate of take-up of the 85 factor retirement provisions and the average age at which retirements under those provisions occur), and a number of economic factors (e.g. assumed CPI, wage increases, and investment return). Some of these factors are known (e.g., average age and marital status of the Plan members), but many are unknown. The actuary chooses assumed values for unknown parameters to reflect the long-term over which pension benefit payments must be calculated (typically over 50 years or more). The assumptions to be used by the actuary are discussed with, and approved by, the Board of Trustees.