For a few years now, the IQPF has been publishing
its Projection Assumption Guidelines. Updated yearly, the
Projection Assumption Guidelines are intended as an aid in making
medium and long-term financial projections, an important part of
the financial planning process.
This year, the Financial Planning Standards Council
(FPSC) has joined the IQPF in the development of unified Canadian
Projection Assumption Guidelines. You can download the
full version now.
Developed by Nathalie Bachand, A.S.A., F.Pl.,
Martin Dupras, A.S.A., F.Pl., M. Fisc., William Jack, CFP,
FCIA, CPCA, Daniel Laverdière, A.S.A., F.Pl., and Patrick
Longhurst, CFP, FCIA, the document includes estimates for the
inflation rate, borrowing rate, life expectancy and three types of
returns: short-term, fixed income and Canadian shares. For the
first time this year, the Guidelines also include an estimate for
the growth of the year's maximum pensionable earnings (YMPE or
MPE).
For 2015, the guidelines are:
- borrowing rate: 4.90%
- inflation rate: 2.00%
- short term returns: 2.90%
- fixed income returns: 3.90%
- Canadian equities returns: 6.30%
- Growth of the YMPE or MPE: 3.00% (inflation + 1%)
The Projection Assumption Guidelines are based on
various external sources such as the Quebec Pension Plan and the
Canada Pension Plan.