The
2016 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., 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 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 2016, the guidelines are:
- borrowing rate: 5.00%
- inflation rate: 2.10%
- short term returns: 3.00%
- fixed income returns: 4.00%
- Canadian equities returns: 6.40%
- Foreign developed market equities returns: 6.80%
- emerging market equities returns: 7.70%
- Growth of the YMPE or MPE: 3.10% (inflation + 1%)
The Projection Assumption Guidelines are based on
various external sources such as the Quebec Pension Plan and the
Canada Pension Plan.