PPAC 3: THE DOLLARS AND CENTS OF PENSIONS

Commuted Values and Related Financial Calculations

• It’s all about accumulation
• The CAP income stream
  • lump sum accumulation
• The DB income stream
  • Commuted values
    • impacted by legislation
      • Minimum Standards Legislation
      • Income Tax Act
  • impacted by CIA Standards
• Using the calculation tools
• Practical exercise – pulling it all together

Actuarial Valuation Process

• What is an actuarial valuation?
• Funding a pension plan
• The valuation process:
  • data collection
  • assumptions & methods
  • calculating assets and liabilities
  • the gain/loss analysis
  • contribution requirements
  • preparing the report
• Practical exercise: case study project

Understanding the Actuarial Valuation

• Funding for pension benefits (going concern & solvency)
• Accounting for pension benefits
• Disclosure requirements vs. communication
• Pension deficits & surplus
• Practical exercises – calculations throughout

Pension Plan Assets

• Requirement to fund
• Three interdependent policies – funding, investment & benefit
• Pension plan investing differentiators
  • Time horizon
  • Tax sheltering
  • Legislation & regulations
  • CAPSA guidelines
• Pension investing basics
  • Capital Markets and pension fund assets
  • typical pension plan assets
  • risk & return, diversification & correlation
  • strategic and tactical asset mixing
  • measuring fund performance
• Understanding pension plan costs