Contribution Rates to Public Service Pension Increase

Members of the Government of Nova Scotia's largest pension plan will see an increase in pension premiums later this year as the government moves to ensure the long-term health of their pension plan, Finance Minister Peter Christie announced today, March 18.

The Public Service Superannuation Plan will require both members and employers to increase pension plan contributions by one per cent as of June 1.

This is the first contribution increase since 1983. The decision was made based on a recent actuarial report on the state of funding of the plan.

"We have a responsibility to protect the pension plan for employees," said Mr. Christie. "This is the first premium increase in over 20 years -- and it represents security for all of our workers."

The Public Service Superannuation Plan has performed well over the years, and surpluses in the fund have been able to subsidize premiums. However, recent actuarial reports show the plan has an annual shortfall in contributions of $23 million. Higher contributions are needed to maintain the level of benefits for retiring employees in future.

Rates will be going up to 6.4 per cent on earnings up to $40,500 and eight per cent on amounts over that. Current pension earners will not be affected.

"This is a responsible and necessary investment that is in the interest of our employees," said Mr. Christie. "The employers of those participating in the plan will continue to match these contributions."

Members of the Public Service Superannuation Plan include Government of Nova Scotia permanent civil servants, highway workers, employees of various Crown corporations, public health and drug dependency workers in the district health authorities, employees of the former Victoria General Hospital and Nova Scotia Hospital as well as some employees at the Nova Scotia Community College, Dalhousie University and Chignecto-Central Regional School Board. There are more than 14,000 active plan members and more than 25,000 active, deferred and retired members.

The change will require a change to the Public Service Superannuation Act in the spring.