H4-PD How to make Commuted Values work CIA/CAS Meeting and CIA General Meeting Mike Lombardi Montreal November 18, 2004 This document is incomplete without the accompanying discussion; it is confidential and intended solely for the information and benefit of the immediate recipient hereof.

Task Force on Pension Values Consistency Established by Practice Standards Council Mandate (a) examine economic and mortality assumptions and other issues of concern and recommend modifications for consistency to both the Standard of Practice for Determining Pension Commuted Values and the Practice-Specific Standards of Practice for Actuarial Evidence Section 4000 and (b) where applicable, establish a rationale for maintaining ongoing differences in the two standards.

Task Force on Pension Values Consistency Timing The Task Force will report back to the Practice Standards Council by June 2005.

Task Force on Pension Values Consistency Members 3 Pension practitioners 3 AE practitioners Neutral chairperson not practicing in either area

Task Force on Pension Values Consistency Members (cont’d) Mike Lombardi (chair) Jay Jeffery Ghislain Nadeau Don Smith Rob Stapleford Doug Townsend David Wolgelerenter

Task Force on Pension Values Consistency Process First meeting of Task Force to go back to first principles to discuss general considerations in setting interest rate assumptions to understand the different business environments in each practice area. Draft discussion paper to be produced and distributed to TF Meeting to review above draft discussion paper Finalization of discussion paper

Task Force on Pension Values Consistency Process (continued) Distribution to CIA members and interested publics together with invitation for comment Review of public consultation submissions Revision of discussion paper incorporating public comments and submission to PSC PSC input and feedback Final report