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Members of the New Brunswick Public Service Pension Plan are receiving a cost-of-living adjustment that doesn’t cover increases in the cost of living in Canada.

According to a press release, the $6.6 billion hybrid pension plan’s board of trustees voted to award its 40,000 members with a 5.24 per cent COLA, set to begin on Jan. 1, 2023. According to the NBPSPP’s funding policy rules, cost-of-living increases are typically based on the average change in Canada’s consumer price index on June 30 of each year. During the most recent period, the CPI reached 5.6 per cent.

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“We are pleased that the plan’s results provided the ability to award a significant COLA . . . while protecting the sustainability of the plan for all current and future members,” said Katherine Greenbank, chair of the NBPSPP board of trustees, in the release.

The board’s decision to offer members a reduced COLA was based on the findings of a recent actuarial valuation that found the plan’s open group funded ratio was 134.8 per cent, up from 130.4 per cent in 2021. Greenbank also indicated plan members could see the shortfall added to the COLA at a later date. “The remaining balance of 0.32 per cent may be provided to members in the future, if the plan is in a financial position to do so.”

In 2021, the NBPSPP’s assets grew by 9.23 per cent, reaching about $6.57 billion. Since its conversion to a hybrid plan in 2014, its annual returns have averaged 7.93 per cent.

The board’s decision comes several weeks after New Brunswick’s auditor general reignited a dispute with the independent public sector asset manager responsible for investing on the NBPSPP’s behalf. In a report, Paul Martin expressed concerns that Vestcor Investment Management Corp., which provides administration services for 11 public sector pension plans and nine public sector clients, declined to provide information requested by Martin’s office.

Read: N.B. auditor general report calls for transparency from public sector investment organization