Nova Scotia’s Public Service Superannuation Plan reported a 98.5 per cent funded status as of Dec. 31, 2019 and said it will halt cost-of-living adjustments for retirees for the next five years.
According to the plan’s 2020 funded health review, its funding policy prohibits indexing when the PSSP’s funded status is below 100 per cent. However, the Public Service Superannuation Plan Trustee Inc., which oversees the fund for N.S. government, university and municipal employees, decided not to adjust contribution rates, which it’s required to consider if the plan’s funded status is above 96 per cent but below 100 per cent.
This is the second funding health review conducted by the PSSPTI since the plan’s funding policy was updated to address a 69 per cent funded status and a $1.6-billion deficit at the end of 2009. In 2015, the plan’s funded status was 104.7 per cent and the cost-of-living increase was set at 0.85 per cent per year. The trustee also allocated $125 million of the plan’s funding surplus to a strategic reserve.
In a press release, Ron Smith, the PSSPTI’s board chair, acknowledged that the lack of cost-of-living adjustments would be disappointing for retirees. “The plan’s funding policy was constructed for the long term and it has always been understood that there will be fluctuations in the amount of indexing the plan can afford to pay.”