Board Communique: November 22, 2021
Valuation surplus is good news for members
Do you have service as a regular* plan member? Learn how you may benefit from the 2020 valuation.
If you are retired, a correctional employee or a full-time or regular part-time ambulance paramedic, please visit the information below to learn more about how the valuation surplus may affect you:
How the 2020 valuation surplus will benefit regular members
The Public Service Pension Board of Trustees is pleased to announce regular plan members will receive an improved pension accrual rate of 1.95 per cent starting April 1, 2022.
Part of the 2020 valuation surplus will be used to improve your pension accrual rate from 1.85 per cent to 1.95 per cent. The improved pension accrual rate will be effective on service earned on and after April 1, 2022.
How an improved accrual rate benefits you
This improvement means you will get more lifetime pension. With a defined benefit pension plan, your pension is determined by a formula. To determine your pension, your accrual rate is multiplied by the average of your five highest years of salary and your years of pensionable service.
More good news: your contribution rate remains the same
The board will use part of the valuation surplus to keep member and employer contribution rates at their current level. This means there will be no change to the rate of pension plan deductions you see on your paycheque.
Preparing for the future
Importantly, the board has set aside $1.1 billion of the valuation surplus for the plan’s rate stabilization account. The purpose of this account is to offset future contribution rate increases. If a future valuation determines the plan needs a contribution rate increase, the board will use available funds from the rate stabilization account to lessen the impact.
What happens next?
The new accrual rate has been added to your personalized pension estimator in My Account. This means the accrual rate will be reflected in new pension estimates with a retirement date at least one month past April 1, 2022.
There is nothing you need to do. Your improved pension accrual rate will be applied to your service on and after April 1, 2022.
More information specific to retired members, correctional employees, and part-time and full-time ambulance paramedics is available in the information below.
Learn about your pension
Visit the Learning resources section of the plan website to read articles, take an online course or sign up for a free instructor-led webinar to learn more about your pension.
Are you a plan employer?
Plan employers of regular members will also benefit from the valuation surplus. Your existing contribution rates will be maintained. A portion of surplus funds will be used to mitigate a contribution rate increase that would otherwise be required due to increasing costs to the plan.
To learn more about valuation surplus decisions and how they will affect employers, please read the Employer Bulletin on the plan website.
*Regular plan members work in non–public safety occupations or as on-call ambulance paramedics. Regular members make up more than 90 per cent of the plan membership.