Indexation rate for
benefits indexed at
75% of CPI less 1%: 1.44% per year
Retirement Age
Maximum value: Members are assumed to retire at the age that maximizes the value of their entitlement from the Plan, based on the eligibility requirements that have been met at the valuation date
Other Assumptions
Final average earnings: N/A
Family composition: Same as for going concern valuation
Termination expenses: $200,000
To determine the hypothetical wind-up position of the Plan, a provision has been made for estimated termination expenses payable from the Plan’s assets in respect of actuarial and administration expenses that may reasonably be expected to be incurred in terminating the Plan and to be charged to the Plan.
In addition, termination expenses also include a provision for transaction fees related to the liquidation of the Plan’s assets and for expenses that may reasonably be expected to be paid by the pension fund under the postulated scenario between the wind-up date and the settlement date. It was assumed for this purpose that the termination process would extend over a two-year period.
Expenses associated with the distribution of any surplus assets that might arise on an actual wind-up are also not included in the estimated termination expense provisions.
In determining the provision for termination expenses payable from the Plan’s assets, we have assumed that the plan sponsor would be solvent on the wind-up date. We have also assumed, without analysis, that the Plan’s terms as well as applicable legislation and court decisions would permit the relevant expenses to be paid from the Plan.
Although the termination expense assumption is a best estimate, actual fees incurred on an actual plan wind-up may differ materially from the estimates disclosed in this report.