Provincial Pension Plans Gain Ground

The provincial government's two major pension plans performed better than expected in 2003, as stalled financial markets rebounded.

Both the Public Service Superannuation Plan and the Teachers' Pension Plan doubled the targeted rate of return in 2003, for a 14 per cent gain over the previous year. The assumed rate of return was seven per cent. Nova Scotia Finance Minister Peter Christie today, July 21, released audited results for the plans as of Dec. 31, 2003.

The Public Service Superannuation Plan improved its funded ratio to 86 per cent, almost a four per cent increase over the previous year. The Teachers' Pension Plan funded ratio also improved four per cent to 81 per cent. All pension plans aim to have their funds fully funded at 100 per cent, to cover current and future pension needs.

"Pension funds are managed for the longer term, but a 14 per cent return on investment in one year is impressive," said Mr. Christie.

Over the past 10 years, the province's pension funds have averaged gains of more than nine per cent. The plans have combined assets of more than $6.7 billion.

For the Public Service Superannuation Plan, the unfunded liability decreased to $493 million, a $94 million improvement over 2002. The Teachers' Pension Plan unfunded liability decreased as well, and is now $871 million, an improvement of $144 million.

There are about 26,000 active and retired members of the Public Service Superannuation Plan and the same number in the Teachers' Pension Plan.

"Members of these pension plans should know that their pension funds are well managed and conservatively invested for their retirement years," said Mr. Christie, who is the trustee for both plans.

The overall health of the Public Service Superannuation plan was strengthened this year with a one per cent contribution rate increase for existing employees, along with a matching increase from the employer. The contribution increase has closed the yearly funding shortfall and will help secure employees' pensions for the long term. This was the first rate increase in 20 years.

The investment funds for both pension plans are monitored by the investment advisory committee, which includes representatives of the provincial government, the Nova Scotia Government Employees' Union and the Nova Scotia Teachers' Union.

Copies of independent valuation results and annual reports for the Public Service Superannuation Plan and the Teachers' Pension Plan can be found on the Department of Finance website at <a href="http://www.gov.ns.ca/finance/pension">www.gov.ns.ca/finance/pension<a/> .