2020 Projection Assumption Guidelines

Date : 30 April 2020

The 2020 Projection Assumption Guidelines are available as of today. Developed and updated annually by a committee of individuals who are all licensed financial planners (through either the F.Pl. license in Québec or the CFP® certification in the rest of Canada) and either actuaries or CFA Charterholders, the Guidelines help financial planners make long-term financial projections (10 or more years) that are free from potential biases or predispositions. The 2020 Guidelines come into effect April 30, 2020.

The Projection Assumption Guidelines for 2020 are as follows:

Inflation rate: 2.00%

Return rates

Short-term: 2.40%
Fixed-income: 2.90%
Canadian equities: 6,10%
Foreign developed market equities: 6,40%
Emerging market equities: 7.10%

Borrowing rate: 4.40%

YMPE, MPE growth rate or salary: 3.00%

To ensure full transparency and replicability, the Guidelines are drawn from a variety of reliable and publicly available data sources, including the Quebec Pension Plan and Canada Pension Plan actuarial reports and historical data based on the S&P/TSX (Canadian equities) Composite index, the S&P 500 (U.S. equities) index and the MSCI EAFE (Europe, Australia, Far East) index. The IQPF and FP Canada also conduct a survey of key actors in financial institutions and other relevant organizations on their long-term expectations.

The Projection Assumptions Guidelines are accompanied by an Addendum containing the data sources on which the Guidelines are based, as well as the specific calculations for inflation and rate-of-return guidelines. The Addendum offers financial planners an opportunity to fully understand and replicate the recommended calculations for their own use.