# Are the rising bond yields affecting Commuted Values ?



## sherwooddavid (May 5, 2009)

I am planning on taking the commuted value of my pension in August and am wondering how much the raising Bond yields is effecting its value.


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## leslie (May 25, 2009)

I am certainly no expert in this but I would think it makes no difference since actuaries only do all their work every three years (in the case of my company's plan) or so. In between times they set an accrual amount using set presumptions, not the actual treasury rates.

Of course they may be booked to revalue the plan between now and fall, so all their value assumptions may change.

The bigger issue really is Why you want to do this. I would kill for a DBPP.


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## billiam (Aug 24, 2009)

Here are some links that discuss valuation in general:

http://www.osstf.on.ca/Default.aspx?DN=f4fc56ea-b027-41d1-a34e-4a3448e4d511

http://www.pspp.ca/e-guide/terminate/commuted.shtml

Google "how is commuted value determined" to get access to more hits.


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## Saniokca (Sep 5, 2009)

Rising bond rates should affect CIA prescribed rates which will affect the commuted value (ie rates going up means that your $$ goes down). Commuted value (in simple terms) is what you need to invest today in order to get the monthly benefit you earned in future. Every temination of employment gets an individual calculation.

The valuations have nothing with your commuted value! (well that's not *entirely *true because if the assets vs. liabilities are in trouble FSCO might not allow the firm to pay out the full amount of your commuted value - but that's another story).


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