Canadian triennial valuations
Check the Perform triennial valuations box under the Minimum Funding Amortization Bases topic of the Asset & Funding Policy to perform a complete valuation every three years and partial valuations during the interim years. A partial valuation is performed if certain requirements are met, based upon the Applicable Provincial Law selection (also selected under the Minimum Funding Amortization Bases topic).
Regardless of the Applicable Provincial Law selection, a complete valuation will always be performed in the following cases:
Valuation Set
Initial valuation year of a forecast
Any year with a plan amendment
The specific requirements that ProVal uses for performing a partial valuation are summarized below, by Applicable Provincial Law selection.
Provincial law selections without restrictions:
Alberta, British Columbia, Newfoundland, Nova Scotia, Saskatchewan, and Quebec under the Applicable Quebec law selection of Regulation respecting funding of the municipal and university sectors have no restrictions regarding when a partial valuation may be performed. Therefore, ProVal will perform a complete valuation every 3rd year and partial valuations during the interim years except for years with a plan amendment.
Provincial law selections with restrictions:
The provinces listed below have minimum funded status requirements that must be met in order to perform a partial valuation. If the funded status requirements are met on the date of a complete valuation, partial valuations will be performed for the next two years (unless an amendment occurs). A full valuation will be performed the year after the second partial valuation.
Federal (PBSA)
The plan must have a solvency ratio of at least 120%.
ProVal measures the solvency ratio as assets divided by solvency liability, where the measure of assets used is the market value of assets plus any letter of credit specified for solvency assets plus the adjustment for non-marketable securities minus the solvency wind-up expense.
Manitoba
The plan must have a solvency ratio of at least 90%.
ProVal measures the solvency ratio as assets divided by solvency liability, where the measure of assets used is the market value of assets plus the adjustment for non-marketable securities minus the solvency wind-up expense.
New Brunswick
The plan must have a transfer ratio of at least 90%.
ProVal measures the transfer ratio as the solvency assets divided by the solvency liability, where the measure of assets is the solvency assets, which reflects any asset smoothing selected for solvency purposes, plus the adjustment for non-marketable securities.
Ontario
In each case outlined below, the solvency ratio and unfunded liability are based upon the solvency liability and the market value of assets plus the adjustment for non-marketable securities.
For valuation dates on or after 12/31/2012
The plan must have a solvency ratio of at least 85%.
For valuation dates prior to 12/31/2012 but on or after 12/31/2010
The plan must have a solvency ratio of at least 80%.
The plan must have a solvency ratio of at least 85% if the unfunded liability is more than $5,000,000.
For valuation dates prior to 12/31/2010
The plan must have a solvency ratio of at least 80%.
The plan must have a solvency ratio of at least 90% if the unfunded liability is more than $5,000,000.
Quebec under the Applicable Quebec law selection of Supplemental Pension Plan Act
The plan must be solvent.
ProVal measures this as a solvency funded ratio of 100% or greater. The ratio is determined as assets divided by solvency liability, where the measure of assets used is the market value of assets plus the adjustment for non-marketable securities minus the solvency wind-up expense.
The plan must be fully funded.
ProVal measures this as a funded ratio of 100% or greater. The ratio is determined as assets divided by ongoing liability, where the measure of assets used is the market value of assets.
If a partial valuation is performed, the normal cost rate and amortization payments are based upon the results of the last complete annual valuation. Thus, the normal cost is based on the rate determined in the complete valuation, and all amortization amounts remain level with the prior year except that they will increase with payroll if so parameterized, and fully amortized bases will drop off.