Business Plan And Budget Template Page 35

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Appendix 1 (Continued) - Analysis of Budget Changes from
2014 to 2015
Forecast 2014 vs. Budget 2014
The forecast net income for 2014 is better than budget by $1,349,010 primarily due to:
Better than anticipated practice fee, investment income and cost recovery revenues.
Lower than expected salary costs in Governance due to retirements and other staff
changes in the latter half of 2014.
Lower than budgeted salary costs in Professionalism, Competence and Access as the
Director and related support roles were filled later in the year than planned.
Higher than expected costs related to the defined benefit pension plan resulting from a
change in Canadian accounting standards. Under this new standard, actuarial gains and
1
losses
can no longer be deferred and amortized over future accounting periods. The
conversion to the new standard will result in a non-cash retroactive charge to expenses
of about $600,000 in 2014. The quantum of this conversion charge was unknown when
the 2014 budget was prepared.
Budget 2015 vs. Budget 2014
The increase in net income from 2014 to 2015 of $1,548,305 is explained as follows:
Revenue – budget increase of $2,188,000
The increase in revenue is due primarily to the proposed fee increase of $90 per lawyer
combined with an assumed increase in membership. Increases in the management fee charged
to ALIA/ALIEX and investment income account for the balance of the increase in the revenue
budget from 2014 to 2015.
Expenses – budget increase of $727,206
A summary of the major components of the change in total expenses is provided below:
1
When estimating a pension liability at the end of a fiscal period, actuaries use various assumptions
about prospective interest rates, mortality rates, salary levels and other factors. An actuarial gain or loss
occurs as these factors change from one fiscal period to the next.
Proposed 2015 Business Plan & Budget
Page 35 of 50

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