An in-depth look at this and other subjects in the current issue of the Morneau Shepell News & Views
TORONTO, Aug. 28, 2019 /CNW/ - Morneau Shepell has released the August 2019 issue of its monthly newsletter, News & Views, in which the company looks at the following topics:
- Actuarial Standards Board provides update on pension commuted value standards – The Actuarial Standards Board (ASB) of the Canadian Institute of Actuaries has announced that it will not move forward with an updated mortality improvement scale in the upcoming revised pension Commuted Value Standards. It has also stated that the revised pension Commuted Value Standards will be released in the early fall of 2019 and will not come into effect before the end of this year.
- Survey highlights trends in economic assumptions for accounting – Morneau Shepell has issued its 19th annual survey on economic assumptions in accounting for the costs of their defined benefit pension plans. Among other things, the survey found that discount rates as at December 31, 2018 had increased from the prior year; more than three quarters of the companies surveyed used a compensation increase assumption between 2.5 per cent and 3.5 per cent; the median assumption for the short-term medical cost trend rate was 5.7 per cent, and more.
- Ontario releases proposed legislative amendments to electronic pension plan communications – On August 6, 2019, the Ontario Ministry of Finance released draft amendments to the Pension Benefits Act that would permit pension plans to use electronic communications as a default method for providing information to their members. The proposed framework will permit plan administrators to provide notices, statements and other records to current and former members in electronic form based on deemed consent.
- Ontario updates pension fee assessments and British Columbia proposes fee increases – Ontario's Financial Services Regulatory Authority of Ontario (FSRA) and the Financial Institutions Commission of British Columbia (FICOM) have recently announced updates to the fees and assessments payable by the pension sector in those provinces. On June 8, 2019, FSRA released a new rule governing fees and assessments. Following this, FICOM released a consultation paper proposing fee increases to pension assessments in British Columbia, which it says are currently insufficient to cover operations.
- Retraite Québec provides additional information on annuity purchasing policy – In July 2019, Retraite Québec updated its website to include information on the annuity purchasing policy, which may be used by a pension plan administrator to discharge its obligation to pay a pension benefit by purchasing an annuity from an insurer. The website describes the process for introducing an annuity purchasing policy, the categories of annuities available, the effects of plan termination and employer withdrawal and more.
- Tracking the funded status of pension plans as at July 31, 2019 – Morneau Shepell describes the funded status of pension plans over the first seven months of 2019 based on three typical investment portfolios. A graph shows the changes in the financial position of a typical defined benefit plan since the end of 2018. A table shows the impact of past returns on plan assets and the effect of interest rate changes on solvency liabilities of a medium duration pension plan.
- The impact of pension expense under international accounting as at July 31, 2019 – Morneau Shepell has shown the evolution of the pension expense for a typical defined benefit pension plan. Since the beginning of the year, the pension expense has increased by 33 per cent for a contributory plan due to the decrease in the discount rates, despite the good returns on assets (relative to the discount rate).
About Morneau Shepell
Morneau Shepell is the leading provider of technology-enabled HR services that delivers an integrated approach to well-being through our cloud-based platform. Our focus is providing everything our clients need to support the mental, physical, social and financial well-being of their people. By improving lives, we improve business. Our approach spans services in employee and family assistance, health and wellness, recognition, pension and benefits administration, retirement and benefits consulting, actuarial and investment services. Morneau Shepell employs approximately 6,000 employees who work with some 24,000 client organizations that use our services in 162 countries. Morneau Shepell is a publicly traded company on the Toronto Stock Exchange (TSX: MSI). For more information, visit morneaushepell.com.
SOURCE Morneau Shepell Inc.