Assets in Alberta pension plans grow 149% in 10 years: report

Over the past 10 years, assets in pension plans registered in Alberta have reached $54 billion, an increase of 149 per cent, according to a new report published by the province’s pension regulator.

The superintendent of pensions’ 2016 report, published last week, looked at the 753 pension plans under its supervision. The total includes 182 defined benefit plans, 451 defined contribution pensions and three collectively bargained, multi-employer plans.

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The report found the market value of assets in Alberta’s defined benefit plans totalled nearly $40 billion as of Dec. 31, 2016, with assets in collectively bargained, multi-employer plans reaching $10 billion and assets in defined contribution pensions at just over $4 billion. In the past 10 years, defined benefit assets have increased by 140 per cent, while collectively bargained, multi-employer assets have risen by 164 per cent and defined contribution assets have gone up by 221 per cent.

The report also calculated assets per plan member, which have increased by 58 per cent to $114,900 over the decade. Defined benefit pensions have significantly more assets per member, at $194,900, than either collectively bargained, multi-employer plans ($57,900) or defined contribution plans ($46,100).

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Some 57 defined benefit pensions had an unfunded liability at Dec. 31, 2016, while 115 plans had a solvency deficiency, according to the report. Going-concern liabilities for active and suspended defined benefit plans averaged about $213.1 million per plan and $120,276 per member. Solvency liabilities for active and pending plans averaged about $463.4 million per plan and $261,596 per member. 

Total special payments into these plans were $2.2 billion over the past 10 years, which includes $1.67 billion in respect of solvency deficiencies and $537 million in respect of unfunded liabilities. 

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The report also lists a number of key objectives and challenges for 2017 and the coming years, including:

  • Assessing the impact of the current economic environment on pension plan affordability, specifically solvency funding and whether it’s an appropriate funding standard;
  • Assessing the level of contribution rates to defined contribution plans to determine the amount of pension income being provided to members; 
  • Determining how many defined benefit plans are open and/or closed to new members and/or have frozen service or earnings for future service for current members.
  • The appropriateness of fees charged, investment options provided and investment information provided to members in defined contribution plans; and
  • The use of default funds in member-directed defined contribution plans.

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