Board Communique: November 22, 2021
Valuation surplus is good news for members
Member News: Pensions improve for full-time and regular part-time ambulance paramedics starting April 1, 2022
In January 2021, the Public Service Pension Board of Trustees announced the 2020 valuation, which determined the plan is fully funded with surplus funds of $2.7 billion. This surplus allows the board to make plan improvements, and the board is pleased to announce that pensions will improve for full-time and regular part-time ambulance paramedics starting April 1, 2022.
Improved pension accrual rate
Your pension is calculated based on a formula, and the accrual rate is the rate at which you build up your pension benefits. Starting April 1, 2022, your pension accrual rate will automatically increase from 1.85 per cent to 1.95 per cent.
What this means: You will earn more pension on service on and after April 1, 2022.
Contribution rate remains the same
The costs to administer the plan have increased, but there will be no change to member contribution rates because the board used a portion of the surplus funds to mitigate a contribution rate increase.
What this means: Your contribution rate will not change.
Your employer’s basic contribution rate remains the same. The employer’s additional contribution rate will decrease from 2.28 per cent to 2.18 per cent (1.96 per cent to the basic account and 0.22 per cent to the inflation adjustment account).
What this means: Plan employers will also benefit from the 2020 valuation surplus, helping to ensure a stable and fully funded pension plan for you.
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 for plan members and employers.
What this means: If a future valuation determines the plan needs a contribution rate increase, the board will use the funds from the rate stabilization account to lessen the effect on members and employers.
Use the personalized pension estimator in My Account to see how the new accrual rate will be applied to your future pension. Starting on November 22, 2021, the new accrual rate will be applied to estimated service for retirement dates calculated on and after May 1, 2022.