This project will clarify the AcSB’s intent regarding the Stabilization Provision established in 2016 by Quebec’s pension regulator for private sector plans. Specifically, the project will clarify that the AcSB’s intent is that the Stabilization Provision should be included in the measurement of the defined benefit obligation when the funding valuation is chosen in Section 3462, Employee Future Benefits.
In June 2018, stakeholders raised an issue with AcSB staff. Diversity has been arising in practice as to whether the Provision for Adverse Deviations (PfAD), as established in 2018 by Ontario’s pension regulator for defined benefit pension plans, should or should not be included in the measurement of the defined benefit obligation when the funding valuation is chosen in Section 3462 (PfAD issue). In September 2018, AcSB staff presented the PfAD issue to the AcSB’s Private Enterprise Advisory Committee for members’ views. In December 2018, the AcSB considered the PfAD issue, including feedback from this Committee. The AcSB decided not to undertake any standard-setting action on the PfAD issue, but rather communicate its intent to reduce diversity arising in practice.
In February 2019, the AcSB wrote a letter to the Canadian Institute of Actuaries to communicate its intent with respect to the PfAD issue. This letter expanded upon the AcSB’s December 2018 Decision Summary — see “At-a-glance – Employee Future Benefits”. The AcSB was aware of the Stabilization Provision, but decided to discuss its implications at the AcSB’s March 2019 meeting.