If you operate a defined benefit (DB) pension plan in Ontario, you already know the rules governing it have changed, but you may be surprised by how much they affect your plan and the opportunities that exist to optimize your outcomes under the new framework.
Using modelling and analytics, our experts have examined the impact of the change in the pension rules on hundreds of different DB pension plans and have uncovered the following insights that can help Pension Plan Sponsors maximize their investments:
- While most less-funded defined benefit pension plans should see their contribution requirements go down, fully funded plans – or those close to being fully funded – could face significant contribution increases over a five-year period
- Many less-funded plans could use the reduced contribution volatility under the new rules to adopt a higher risk tolerance. Some DB Pension plans could even more than double their exposure to equities or alternative investments with limited downside contribution risk.
- Some plans may want to file their pension valuations quickly to benefit from the new rules in 2018 while others will want to delay filing for as long as possible. Special transition rules, if used properly, could generate even more advantages for some plans.
Our pension experts and actuarial and investment professionals are ready to help you understand how the new framework affects your specific plan and what steps to take to make sure you are complying with all of the new rules. We can also help you define your plan’s sustainability objective and identify the investment and funding strategies that are the best fit for you and your members.
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