The Trustees of the Plan are pleased to advise that, as a result of an improvement in the Plan’s financial condition from the careful and consistent management of the Plan’s assets, incoming contributions, and target benefit levels, you will be receiving an increase to your pension benefits effective January 1, 2023.
The most recent actuarial valuation of the Plan as at December 31, 2021 showed the Plan had an excess in funding. A portion of this excess will be used to increase pensions currently in payment and to increase the benefits of those members of the Plan who have not yet commenced their pensions.
The Trustees of the Plan and their advisors are closely monitoring the economy and the Plan’s investments. Over the past several years, the Trustees have diversified the assets to include allocations to commercial real estate, private debt and infrastructure to improve the long-term expected rate of return while keeping investment-related risk at a reasonable level. These asset allocation changes have allowed the Plan to be in a position to improve benefits. Even after considering the current risks in markets, the Trustees are confident that the increase is reasonable and appropriate. After reflecting the increase, the Plan has an excess, in accordance with pension legislation, to act as a cushion in the event that market conditions deteriorate further.
Benefit Increase Details
At their most recent meeting, the Trustees of the Plan passed a motion to increase pension benefits accrued to December 31, 2022 by 10%. The increase will come into effect January 1, 2023.
Please note that if you are eligible for a lump-sum commuted value payout and exercise that option before January 1, 2023, your pension benefits will not include this increase; any lump-sum benefits must be paid on or after January 1, 2023 to be eligible for the increase.
Persons in receipt of monthly pensions from the Plan will also receive a benefit improvement; their pensions will increase by 10% effective with their first payment in 2023.
Target Benefit Plan
As communicated to members in 2017, the pension benefits provided by the Plan are not a “promise”, but rather a “target”. Under this plan type, there may be circumstances where pensions need to be decreased. The Trustees manage the Plan prudently to reduce the chance of pension decreases, but these remain a possibility, particularly if investments perform poorly. But as is the case with the increase communicated herein, if the Plan is managed well and experience is favourable, there will be opportunities to increase benefits. The Trustees will continue to monitor and manage the financial health of your Plan to maintain an appropriate balance between benefit security and a sustainable level of benefits over the long term.
If you have any questions, please contact the Plan Administrator at 1-877-623-6368.