Finance committee  Well, I'm not an economist, so I don't know how best.... I think government is always balancing the needs of current programs and their costs and debt reduction. From a risk management perspective, though, my understanding is that the federal debt is around $600 billion. The debt is very short in term, and we're at a point now where interest rates are at historic lows.

Finance committee  I think the 10% number bandied around is one possible approach to this problem. Perhaps more importantly, the level of surplus that a pension plan should properly hold should be related to the risks assumed by the plan. Depending on the nature of its asset mix, depending on the nature of its promises to plan participants, the riskier they are, the higher level of surplus it makes sense for the plan to target, either as a minimum prudential level of surplus or as a target surplus that the employer or the plan sponsor may choose to maintain.

Finance committee  Well, there's a limit in the federal tax code; a contribution holiday needs to be taken whenever the accumulated surplus is more than twice the normal annual cost of providing the pension benefits. In the nineties, certainly with high proportions of the assets in equities and good results in the equities, surpluses were being developed and contribution holidays were taken that, in retrospect, might have been better not to take.

Finance committee  Mr. Chairman and members of the committee, on behalf of the Canadian Institute of Actuaries, I would like to thank you for the opportunity of appearing and providing input into this year's pre-budget hearings. It's actually the first time we as an institute have done that. My name is Michael Hale, and I'm chair of the institute's member services council.