When someone leaves a pension plan, they may be able to take a lump sum amount of money instead of receiving future pension payments from the plan – this is called their pension “commuted value.”
This factsheet examines the complex process of estimating one’s commuted value and the different variables that can affect how estimates are calculated. The factsheet also highlights measures by the Actuarial Standards Board to ensure calculations remain fair and consistent for those leaving a pension plan, those staying, as well as employers and other plan stakeholders.