The 2017 Projection Assumption Guidelines, published by the IQPF
and FPSC, are now available. Updated yearly, the Guidelines are in
their 10th year, since they were first presented at the 2008 IQPF
congress.
Developed by Nathalie Bachand, A.S.A., F.Pl.,
Martin Dupras, A.S.A., F.Pl., M.Fisc., ASC, Daniel Laverdière, A.S.A., F.Pl., Patrick
Longhurst, CFP, FCIA and A. Kim Young, CFP, FCIA, the document includes estimates for the
inflation rate, borrowing rate, life expectancy and 5 types of
returns: short-term, fixed income, Canadian equities, foreign
developed market equities and emerging market equities. The
Guidelines also include an estimate for the growth of the year's
maximum pensionable earnings (YMPE or MPE).
For 2017, the guidelines are:
- borrowing rate: 4.90%
- inflation rate: 2.00%
- short-term returns: 2.90%
- fixed income returns: 3.90%
- Canadian equities returns: 6.50%
- Foreign developed market equities returns: 6.70%
- emerging market equities returns: 7.50%
- 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.
An Addendum
accompanies the 2017 Projection Assumption Guidelines.
This additional document contains the data sources on
which the Projection Assumption Guidelines are based,
as well as the specific calculations for inflation and
rate of return guidelines. The Addendum also includes
historical Projection Assumption Guidelines dating back
to 2009, rates of return for relevant indices and the
standard deviation of returns.