This research paper focuses on the impact of Canada’s new pension legislation on the funding of defined benefit (DB) pension plans. The paper presents a mathematical model for projecting the assets, liabilities, and funded ratio of a DB plan and proposes an integrated approach to developing a long-term funding strategy for DB plans.
This research can assist DB plan sponsors and trustees in managing contribution requirements and putting plans on a sustainable funding path. Pension consultants and actuaries may use the model to assess the impacts of funding-related policies on individual pension plans.