PSPP contribution rates for 2021 will remain unchanged from 2020. The PSPP Sponsor Board strives for contribution rate stability while ensuring benefit security and Plan sustainability. Member and Employer contribution rates for 2021 are:
Rate on salary up to YMPE : 10.47%
Rate on salary over YMPE: 14.95%
The 2021 contribution rates were determined based on the results of an actuarial valuation of the Plan as at December 31, 2019. An actuarial valuation helps us determine whether there is enough money in the pension fund to pay benefits to members and to determine whether contribution rates are sufficient to fund benefits currently being earned. The 2019 valuation results are great news!
The funded status of the Plan at the end of 2019 was 104.9%, up from 94.4% in 2017, when the previous actuarial valuation of the Plan was completed. This means that as at December 31, 2019, the Plan was more than fully funded.
What does fully funded mean?
It means that the plan has sufficient assets to satisfy all obligations to current and future retirees.
Although the Plan is currently fully funded with a small surplus, a drop in the markets can impact the Plan quickly. Given the uncertainty of the markets in 2020, the PSPP Sponsor Board decided to maintain conservative contribution rates to protect the security of benefits. This allows the surplus to help offset potential 2020 market impacts. The PSPP Sponsor Board will continue to monitor contribution rates on an annual basis.
More information on PSPP’s funded status can be found in the PSPP actuarial valuation report.