Nova Scotia Teachers’ returns 12.36%, issues cautions about coronavirus impact

The Nova Scotia Teachers’ Pension Plan is bracing for the effect of the coronavirus pandemic on its assets as it reported a 78.2 per cent funded status on a going-concern basis — up from 75.3 per cent at the end of 2018 — and a $1.497-million deficit in its 2019 annual results.

“While the plan remains in a deficit position and continues to face significant challenges, there is no immediate risk that the plan will be unable to meet its ongoing pension obligations,” said John Carter, chair of the Nova Scotia Teachers’ Pension Plan Trustee Inc., in a press release. However, he noted, “the unprecedented impact the coronavirus has had on the economy in early 2020 may materially worsen the plan’s position.”

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Carter called on the plan’s sponsors — the provincial government and the Nova Scotia Teachers Union — to implement amendments suggested by Kathryn Bush, partner at Blake, Cassels and Graydon LLP to improve the plan’s long-term financial stability. “It is important to note that the plan’s financial position could further deteriorate going forward unless the plan sponsors take significant steps to address these challenges.”

The NSTPP returned 12.36 per cent net of investment fees in 2019 and grew its net assets to more than $5.35 billion, up from $4.93 billion in 2018. It slightly underperformed its policy benchmark of 12.43 per cent.

In the release, the plan trustee noted it had reduced its discount rate from the 2018 rate of 6.05 per cent, reflecting the low interest rate environment and a prolonged slowdown in the global economy.

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