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The College of Applied Arts and Technology pension plan was 113.3 per cent funded on a going-reserve basis as of Jan. 1, 2017, according to its latest actuarial valuation, representing a 2.6 per cent increase from last year’s funded status.
The valuation assumes members who are currently retiring will live to age 89. The plan also has a funding reserve of $1.6 billion, which is 33 per cent more than last year’s reserve of $1.2 billion.
The valuation also lowered the plan’s discount rate by 0.1 percentage points to 5.6 per cent, acknowledging that long-term investment returns may decrease slightly.
“For the seventh straight year our funded position has improved,” said Derek Dobson, chief executive officer and plan manager, in a release, noting the 2017 funded ratio is “the strongest result in our 21-year history of being a jointly sponsored pension plan.
“Long-term projections show the plan’s financial health should remain resilient into the future providing benefit security and contribution stability to our members and employers.”
The plan will file this valuation with regulators in the next few weeks. That way, it won’t have to file another valuation until 2020 and can ensure contribution rates can stay the same until 2021.
“We are releasing our valuation results ahead of our annual investment returns because the funded status of the plan is the more important measure of benefit security and sustainability,” Dobson said. The pension plan’s annual investment return is due to be released in mid-April.
The plan has 45,000 members working across 38 different employers.