Pensions

Many Canadians take part in defined benefit (DB) or defined contribution (DC) pension plans offered by their employers. Though the details of these plans differ, and hybrid plan models exist, they all require complex evaluations by a highly skilled actuary. Approximately 40% of CIA members practice in the pension/retirement area. Pension plans can represent a significant liability for the plan sponsor and are obviously of immense value to the people who will rely on them in retirement.

Actuaries are involved in many complex parts of this area, including:

• evaluating benefit or contribution amounts and plan design in general;
• examining volatility, modelling future investment returns and indexing against inflation;
• determining liability and measuring financial risk;
• developing assumptions for life expectancy and salary changes; and
• certifying the valuation of a pension plan’s liabilities.