The parameters of the Solvency Liability Cost-of-Living Adjustments (COLAs) topic specify, for purposes of computing solvency liability values, the assumed rates of increase in annual pension benefit, applied to inactive records and to active records after decrement from active status, to reflect, typically, cost-of-living adjustments, although COLAs can be used to model other provisions that increase pension amounts only after decrement. You may enter separate Transfer Value Liability COLAs and Annuity Purchase Liability COLAs.

The same parameters as available for the Ongoing Liability Cost-of-Living Adjustments (COLAs) topic are available for entering transfer value and annuity purchase COLAs. See the discussion under that topic for details about parameter coding. However, the Transfer Value Liability COLAs can also optionally be set to vary by duration from the valuation date (or the projected valuation date in a core projection).

For guidance, see the applicable provincial legislation and promulgations (standards of practice, educational notes, etc.) of the Canadian Institute of Actuaries. For details about ProVal’s methodology for computing solvency liability, see the Canadian Solvency Liability calculations Technical Reference article.