Pension Plan Assumption Changes – Frequently Asked Questions The following are questions you may have about the recent updates to pension plan assumptions: 1.
What are Pension Plan Assumptions? Plan assumptions are used in preparing actuarial valuation reports and are set by the Pension Plan Boards. They are long‐term estimates of the economic and demographic assumptions for the Plan. These assumptions include factors such as interest rates, inflation rates, mortality rates and retirement ages: 
For members who are retiring, these assumptions impact the optional forms of pension a member may select. 
For members who are transferring into or out of the Plan, these assumptions are used to determine the value of the member’s pension. 
For members who are purchasing optional service, these assumptions impact the cost of optional service. 2. When are plan assumptions updated? Plan assumptions are updated after three events:  after an actuarial valuation report identifies a change in economic or demographic assumptions;  when a new Standard of Practice for the Canadian Institute of Actuaries becomes effective; or  when changes to legislation are made. 3. What is an Actuarial Valuation? An actuarial valuation is a mathematical analysis of the financial condition of a pension plan. An actuary prepares a plan valuation at least once every three years. The valuation determines the financial position of the pension plan and the future contribution rates needed to ensure the long‐term funding of the Plan. 4. What triggered this change in plan assumptions now? Plan assumptions are used in preparing actuarial valuation reports and are set by the Pension Plan Boards. In this case, plan assumptions were revised because long‐term economic assumptions have changed and because life expectancy is increasing. 5. How does this impact my previous calculations/estimates? Web estimators and calculations will be updated to reflect these changes effective July 1, 2010. As a result, you may notice new calculations/estimates are higher, lower or the same as those completed before July 1. If you are retiring after July 1, 2010 and have already received a Pension Options Package, we will send you an updated package that uses the new plan assumptions. If you completed a calculation/estimate online, you can use mypensionplan to run a new calculation/estimate after July 1, 2010. 6. Does this mean I will have higher or lower pension benefit after July 1, 2010? Everyone’s individual circumstances are different. Your base pension (also known as a normal pension) will be the same. However, if you select an optional form of pension, such as a ten or fifteen‐year guarantee or a joint‐life pension, your benefit will be impacted by plan assumption changes. If you are transferring from/to a different plan, the new plan assumptions will be used to determine your pension value. The plan assumptions were revised because long‐term assumptions have changed and life expectancy is increasing. 7. Interest rates are going up, but plan assumptions changes are partially based on lower than expected interest rates and economic conditions. How does that work? Economic assumptions, such as interest rates are long‐term estimates. Assumptions need to be updated to reflect the differences between what was expected and what actually occurred. 8. What do these changes mean in the long‐term? These changes help to ensure the pension plan is properly funded.