Policy on the CBC/Radio-Canada Pension Plan Funding

Effective Date: February 24, 2015
Responsibility: Vice-President and Chief Financial Officer


This Policy is intended to set out appropriate funding principles, taking into account (i) the main factors that affect the CBC/Radio-Canada Pension Plan’s (the Plan) going-concern and solvency positions, (ii) the ability of the Corporation and the Plan to meet the Plan’s financial obligations, and (iii) the needs and objectives of the Plan and the Corporation. This Policy is also intended to provide guidance to management and the actuary of the Plan on how the Corporation wishes to fund the Plan.


CBC/Radio-Canada (the Corporation) established the Plan effective September 1, 1961 pursuant to the Broadcasting Act. As the Plan sponsor, the Corporation is responsible for ensuring that the Plan is funded in accordance with the Pension Benefits Standards Act, 1985 and its regulations (PBSA) as well as the Income Tax Act and its regulations.

Pursuant to s. 47(1) of the Broadcasting Act, CBC/Radio-Canada is an agent of the Crown and therefore has the constitutional immunities, privileges and prerogatives that are enjoyed by the Crown. The Crown is also fully liable and financially exposed for all of CBC/Radio-Canada’s actions and decisions while CBC/Radio-Canada is operating within its mandate (including for the funding of the Plan).


Please see the website of the Office of Superintendent of Financial Institutions (OFSI) at: www.osfi-bsif.gc.ca.


The Corporation shall ensure that the Plan is funded in accordance with at least the minimum levels pursuant to the PBSA (including any funding relief measures that may be permitted from time to time). The Corporation will seek to reduce special payments subject to the limits and parameters set out in the PBSA. In addition, when a going concern unfunded liability and/or a solvency deficiency exists, these liabilities are to be funded over the longest period permitted by the PBSA.


In respect of the Plan, benefits are funded through a combination of contributions (including special payments) and investment returns. Due to the nature of the Plan, deficits may arise from time to time as actual experience will be different than assumptions.

In the short-term, the expected funding level is to achieve full funding of the Plan on a going concern basis.

Over the long-term, the expected funding level is to achieve full funding of the Plan on both a going concern and solvency basis in a range that provides flexibility for the Corporation’s normal cost contributions (i.e. no funding deficits or excesses).

The employees’ contributions rates are established in section 4 of the Corporation’s Bylaw Schedule B “CBC/Radio-Canada Pension Plan” as amended from time to time. The Corporation aims to align the employee’s contribution share with those of the Federal Public Service Pension Plan.


The Plan’s investment policy is determined by the CBC Pension Board of Trustees, as amended from time to time.


The Corporation reserves the right to fund the Plan in excess of the legislated minimum requirement, but not more than the maximum levels pursuant to the Income Tax Act as determined by the actuarial valuations.


The CBC Pension Board of Trustees is responsible for the management of the risks associated with Plan’s performance.

Funding risks for the Plan are driven primarily by the financial position of the Plan; that is, the sufficiency of the Pension Fund’s assets to meet the Plan’s liabilities. The financial position of the Plan is determined through actuarial valuations that assess the financial position under two approaches: on a going concern basis and on a solvency basis.

The financial position of the Plan is impacted by demographic and economic factors, including the Pension Fund’s actual and expected investment returns. Mismatches in the performance of the assets relative to the liabilities result mainly from the following:

  • Actual experience being different from actuarial assumptions for economic factors, including in relation to the Pension Fund’s short- and long-term investment returns and inflation, which is caused in particular by mismatches between the nature of the assets and the nature of the liabilities (e.g. in terms of the timing and predictability of cash flows). For example:
    • Higher inflation than expected increases liabilities (increases deficit/reduces surplus under both bases). It is recognized that such liability increases may somewhat be offset by increases in investment returns
    • Investment returns that are below expectation increase deficit/reduce surplus under both bases (since assets are less than expected).
  • Changes in expectations with regards to the economic outlook also have an impact on the assumptions and more so regarding changes in assumptions from one valuation to the next.
    • Interest rates are the key driver of the liabilities as measured on a solvency basis. The solvency valuation is used for setting the requirement for deficit funding, therefore low interest rates increase funding pressure by increasing the deficit funding requirement. Also, low interest rates and lack of indication of timing and pace of future increases create uncertainty that drive a lower discount rate for the going-concern valuation hence increasing the normal cost
    • Inflation (current and expected) is an important component of the determination of both the solvency discount rate and the going-concern discount rate
    • Lower market return expectations or increased uncertainty drive a lower discount rate for the going concern valuation.
  • Actual experience being different from actuarial assumptions for demographic factors, including longevity, withdrawals, and retirements.
    • Longevity is the primary demographic risk. Risk is either a change in expectation (new mortality table like the one adopted in the December 2013 valuation) or longevity experience that differs from expectations. Mortality expectations contain two parts: current rates and an improvement scale.
  • The maturity of the Plan, including its aging membership and declining active member population.
  • Changes in the legislative and regulatory environments, especially in the funding requirements which are a key risk considering that the Corporation apply minimum funding hence any changes in the requirement could generate a positive or negative impact depending on the changes adopted.
  • Actuarial standards, which impact the actuarial valuations.

From the perspectives of various stakeholders, funding risks can have the following implications:

  • For the Corporation, the Plan sponsor, funding risks can result in changes to contribution requirements, which can create significant cash flow challenges for the Corporation
  • For active members, funding risk can be a factor leading to changes to employee contribution levels.


If and when a surplus arises under the Plan, the Corporation may use the surplus to reduce the Corporation’s funding requirements (to the extent permitted under the PBSA and the governing documentation), increase the benefits payable under the Plan, reduce employee contributions or any such other permitted action as it may deem appropriate.


The actuarial methods and assumptions are selected by the CBC Pension Board of Trustees with the Plan actuary by virtue of the Trust Deed between the Corporation and the Trustees dated August 3, 1961 as amended from time to time.


In accordance with the directives of OSFI pursuant to the PBSA, and unless otherwise directed by OSFI, the CBC Pension Board of Trustees ensures that actuarial valuations will be undertaken as prescribed by legislation and file the actuarial reports (or, in the case of Plan amendments, interim or amendments to reports) with OSFI within six months of the date of the valuation.


The Vice-President and Chief Financial Officer shall review this Policy on a triennial basis or more frequently, as necessary or appropriate, and report to the Audit Committee on such review, and submit, as necessary or appropriate proposed policy changes for approval.


  • CBC/Radio-Canada Bylaws Schedule B “CBC/Radio-Canada Pension Plan”
  • CBC/Radio-Canada Bylaws Schedule C “CBC/Radio-Canada Pension Plan Trust Deed”


All questions pertaining to the interpretation or application of this Policy should be referred to the Vice-President and Chief Financial Officer.

Search highlight tool