LOOKING BACK…focused on the future CIA Annual Meeting LOOKING BACK…focused on the future

Pension Review Project Marcus Robertson, FSA, FCIA June 28, 2005

Purpose and description Process Overall Findings Suggested Improvements Recommendations June 28, 2005

Purpose Description Enhance CIA support and advice for actuaries Provide input to practice committees Promote highest quality Description Review 100 actuarial reports filed with regulators June 28, 2005

Process Quasi-random selection of 100 reports Team of 10 reviewers 81 Ontario and 19 BC Team of 10 reviewers Experienced pension practitioners Recently retired or changed practice Reviews allocated randomly, filtered to avoid conflicts June 28, 2005

Process (cont’d) Reports obtained directly from authors Two reviewers per report Comprehensive checklist for consistency Strict confidentiality protocol Rule 13 exemption applies Deliverables Report to Board Advice to authors Destruction of documents June 28, 2005

Overall Findings 100 reports received and reviewed No material non-compliance in most reports Contents generally complete and satisfactory In the context of existing standards and regulatory requirements Two reports in question Authors are being contacted and will be asked to take corrective actions, if necessary June 28, 2005

Suggested Improvements – Data and Disclosures Intended users Subsequent events Plan provisions Composition of assets Number of signatories June 28, 2005

Suggested Improvements – Going Concern Asset valuation methods Economic assumptions Demographic assumptions Plan expenses MfADs Discussion and use of gains and losses June 28, 2005

Suggested Improvements – Solvency Asset valuation methods Description of solvency methodology Wind-up expenses Wind-up deficiency June 28, 2005

Recommendations Educational Notes Standards Regulations Future reviews June 28, 2005

Educational Notes Asset valuation methods Economic assumptions Appropriate MfADs Expense assumptions Going concern and wind-up Checklist Desirable practice for gain and loss Disclosure re data, assets and plan terms Negotiated contribution defined benefit plans June 28, 2005

Standards Justification of economic and demographic assumptions Quantification and disclosure of MfADs Explicit statements re subsequent events Quantification and disclosure of wind-up position June 28, 2005

Regulations Recommendation is for discussions between the CIA and regulators regarding: Changes in methods between valuations Selection of valuation dates June 28, 2005

Future Reviews Current review identified potential changes Recommendation is to: Make changes Let the changes work through the system (at least two years) Decide then whether or not to repeat the process June 28, 2005

Thanks go to: Regulators, for providing internal checklists and identifying plans Reviewers, for their efforts in reviewing valuation reports Secretariat, for their significant coordination efforts June 28, 2005

Questions? June 28, 2005