THE VALUE(S) Why are there so many values in a valuation report?
• We are required to provide the value of the pension accrued up to the date of valuation and the portion accrued during the marriage based on different retirement age scenarios as well as before and after adjustment for income tax. • Indexation scenarios for public plans tend to provide automatic indexation. For some private plans, we may have to provide a few scenarios if the pension is indexed on an ad hoc basis. • If the member has elective service, we may show two different approaches for the buy back of that service (deemed accrued at election or gradually as it is being repaid by the member). Can actuaries arbitrarily select the valuation assumptions? No. To calculate the capitalized value of a pension, the actuary will have to make certain assumptions. Because all actuaries are bound to the standards of practice as defined by the Canadian Institute of Actuaries (CIA), most assumptions used to perform a pension valuation are those dictated by the CIA, therefore ensuring a certai
