The current Standards of Practice require, with limited exceptions, an external user report on the funded status or funding of a pension plan to report the incremental cost on a hypothetical wind-up or solvency basis. This educational note is intended to assist actuaries in the calculation of a pension plan’s incremental cost on a hypothetical wind-up or solvency basis.
An educational note on the same subject was originally issued on December 21, 2010. This educational note is an update to the prior educational note in light of the recent quinquennial review and update of the pension-specific standards of practice (Part 3000).