Acts and Regulations

91-195 - General

Section 8.2
Disposition versions

Full text
Combined target asset allocation – provision for adverse deviations
2020-51
8.2(1)A pension plan’s combined target asset allocation for non-fixed income assets shall be determined in accordance with the following formula:
100% – C
where
C =the combined target asset allocation for fixed income assets, determined in accordance with subsection (2).
8.2(2)The value of “C” in the formula in subsection (1) shall be determined in accordance with the following formula:
[D + (0.5 x E) + (F x G) + (0.5 x F x H)] ÷ (100% – J)
where
D = subject to subsections (4) and (5), the sum of the pension plan’s target asset allocations for each of the investment categories listed in paragraphs 8.4(a), (c) to (e), (o) and (p), excluding any portions of the target asset allocations that are allocated to the assets described in “J”, expressed as a percentage;
E =subject to subsection (5), the sum of the pension plan’s target asset allocations for each of the investment categories listed in paragraphs 8.4(f) to (k) and (q);
F =the pension plan’s target asset allocation for the investment category listed in paragraph 8.4(b), expressed as a percentage;
G =subject to subsections (4) and (6), the portion of the value of “F” that is allocated to the investment categories listed in paragraphs 8.4(a), (c) to (e), (o) and (p), expressed as a percentage;
H =subject to subsection (6), the portion of the value of “F” that is allocated to the investment categories listed in paragraphs 8.4(f) to (k) and (q), expressed as a percentage;
J =the portion of the pension plan’s target asset allocation for each investment category listed in paragraphs 8.4(a), (c) to (k) and (o) to (q), expressed as a percentage, that is allocated to annuity contracts that have been purchased from an insurance company in respect of benefits.
8.2(3)The target asset allocation to be used in the calculation in subsection (2) is the target asset allocation in the pension plan’s statement of investment policies and goals that is in effect as of the same review date used for the calculation of the provision for adverse deviations under subsection 8.1(1).
8.2(4)In determining the values of “D” and “G” in subsection (2), any portion of a target asset allocation for an investment category listed in paragraphs 8.4(d), (o) and (p) shall not be included unless the pension plan’s statement of investment policies and goals sets out a minimum rating for target asset allocations of fixed income assets in the investment category, or the portion of the investment category, that is given by a credit rating agency recognized by a competent authority.
8.2(5)Any portion of a target asset allocation excluded under subsection (4) from the value of “D” shall be included in the value of “E” in the formula in subsection (2).
8.2(6)Any portion of a target asset allocation excluded under subsection (4) from the value of “G” shall be included in the value of “H” in the formula in subsection (2).
2020-51