Some terms are defined specifically within the field of actuarial evidence and may not apply in other contexts.
ABack to top
An actuary is a specialist who is skilled in the application of mathematics to financial problems faced by individuals, regulators, pension plans and insurance companies with respect to property loss and damage, retirement, sickness, disability, investment risk and other area.
In some legislations and regulations, the term "actuary" is specifically defined as a Fellow of the Canadian Institute of Actuaries (FCIA).
The condition in which two or more payment streams have the same present value based on the appropriate valuation assumptions.
This is one of the practice areas of actuaries. The actuarial evidence practice covers a broad range of technical advice to the courts, other tribunals and to the parties involved in legal actions. Such advice may include testimony as an expert witness (extract from the CIA website). Actuaries practicing in actuarial evidence will combine the use of probability and statistics, compound interest, life contingencies, and finance and risk theory to calculate the present value of streams of payments associated with uncertain future events associated with divorce, personal injury, disability, fatality, wrongful dismissal and others.
We use this term to refer to reports prepared by actuaries practicing in the area of actuarial evidence. An actuarial valuation for the purpose of marriage breakdown (also called a pension valuation) will provide the present value of the pension asset subject to division. In cases of personal injury, disability, fatality and wrongful dismissal, an actuarial valuation will address the present value of the financial losses sustained by individuals and/or their families.
BBack to top
A bridge benefit is a benefit provided by some pension plans to members who retire prior to normal retirement age. It is often provided to supplement the member’s pension until the age of 65.
CBack to top
The Canadian Institute of Actuaries is the national organization of the actuarial profession in Canada. The CIA is dedicated to serving the public through the provision, by the profession, of actuarial services and advice of the highest quality.
The CIA establishes the Rules of Professional Conduct, guiding principles and monitoring processes for qualified actuaries. The CIA also assists the Actuarial Standards Board in developing standards of practice applicable to actuaries practicing in Canada.
We primarily use this term in actuarial valuations for marriage breakdown purposes. The capitalized value represents the present value at the date of separation of the pension entitlements accrued by the member spouse assuming the member spouse will retire at a specific age. The capitalized value is set in accordance to the Practice-Specific Standards for Actuarial Evidence established by the Canadian Institute of Actuaries.
This term is commonly used to represent the present value of the pension entitlements accrued by the member at the member’s actual or assumed date of termination of employment. The commuted value is set in accordance to Practice-Specific Standards for Pension Plans established by the Canadian Institute of Actuaries.
DBack to top
In marriage breakdown, the date of valuation corresponds to the date of separation.
In civil litigation cases, the date of valuation often corresponds to the mediation date or trial start date. Losses incurred before that date are referred to as past losses. Those expected after the date of valuation are future losses.
Defined Benefit pension plan (DB)
A Defined Benefit plan is a plan that defines and guarantees specific pension benefits that the member will receive at retirement based on years of plan membership, average earnings, etc., in accordance with the terms of the plan.
Defined Contribution pension plan (DC or Money purchase pension plan)
Under a DC plan, participating employees accumulate individual accounts by way of employer/ employee contributions. Funds grow until retirement. The benefit the member will receive on retirement is calculated at the date of retirement and depends on the sum accumulated in the member individual account and the annuity rate at retirement. If a plan is registered for tax purposes, the maximum contribution amount is defined by tax regulations.
FBack to top
This term is used in the context of a pension accrued under a Defined Benefit pension plan. A plan may limit the number of years of pensionable service that members can accrue under the plan. The member has at that point accrued a full pension. Beyond that point, the member’s pension entitlements can only increase as a result of an increase in salaries.
LBack to top
MBack to top
Maximum Transferable Amount (MTA)
This term is strictly used in the context of a division of pension accrued under the federal public service plans in the case of marriage breakdown. The MTA is the maximum amount that will be paid under the Pension Benefits Division Act (PBDA).
PBack to top
The present value is the value on a given date of an amount or series of amounts payable or receivable at various times, and accumulated (for past amounts) or discounted (for future amounts) to reflect the time value of money and other factors (e.g. mortality risk for future amounts). Where applicable, the present value is set in accordance to the Practice-Specific Standards for Actuarial Evidence established by the Canadian Institute of Actuaries.
YBack to top
Year’s Maximum Pensionable Earnings (YMPE)
The YMPE are the earnings on which Canada/Quebec Pension Plan (CPP/QPP) contributions and benefits are calculated. YMPE changes every year based on a formula using average wage levels. YMPE is published annually by the Canada Customs and Revenue Agency. The YMPE was $44,900 in 2008, $46,300 in 2009, $47,200 in 2010, $48,300 in 2011 and is $50,100 in 2012.