Important Notice: Our web hosting provider recently started charging us for additional visits, which was unexpected. In response, we're seeking donations. Depending on the situation, we may explore different monetization options for our Community and Expert Contributors. It's crucial to provide more returns for their expertise and offer more Expert Validated Answers or AI Validated Answers. Learn more about our hosting issue here.

The short answer is that there is no publicly available listing per se of solvency interest rates. But the matter is a bit more complicated than just “what is the rate?

0
Posted

The short answer is that there is no publicly available listing per se of solvency interest rates. But the matter is a bit more complicated than just “what is the rate?

0

Solvency actuarial valuations for defined benefit pension plans in Canada generally have two solvency interest rates (i.e., discount rates), based on the expected form of settlement of the pension benefit: one for members eligible for a lump sum transfer out of the plan and another for members where an annuity purchase is expected. The basis for the solvency rate for transfers is dictated by standards produced by the Actuarial Standards Board (ASB) and is based on Government of Canada bond yields. The interest rate also varies depending on whether the pension plan provides post-retirement adjustments. The CIA provides guidance on the solvency rates to use for annuity purchases based on input from insurance companies that sell such annuities; however, the rates used can vary based on the average size of the annuity purchase premium (by individual plan member) and whether the pension payments will commence immediately or are delayed until some future date.

Related Questions

What is your question?

*Sadly, we had to bring back ads too. Hopefully more targeted.