Halifax, NS – April 27, 2023 – Nova Scotia Teachers’ Pension Plan Trustee Inc. (TPPTI) announced today that the Teachers’ Pension Plan’s (Plan) funded status at the end of 2022 decreased to 75.1% on a goingconcern basis, compared to 82.5% at the end of 2021. The decrease in the funded ratio year-over-year was due to the asset losses in 2022 and to the fact that the Plan’s discount rate was maintained at 5.70%.
As at December 31, 2022, the Plan’s deficit was $1.819 billion, being the difference between the net assets available for payment of benefits of $5.480 billion and the actuarially calculated liabilities of $7.299 billion.
At year-end 2022, the Plan achieved an absolute one-year return of -4.05%, net of investment management fees (-3.88%, gross of investment management fees). The Plan underperformed the policy benchmark of -3.69%. The significant headwinds of 2022 in public equity and fixed income investments resulted in material losses for most Canadian pension plans. “The TPP’s diversified asset mix is built to weather tough times and did so effectively in 2022,” stated TPPTI Chair, John Rogers. “We are pleased with the way the TPP held up in 2022 and with its performance compared to most plans in Canada.”
While the Plan’s continuing maturity remains a significant concern, there was a modest increase in the active membership to 13,653 members (an increase of 447 from 2021). This resulted in the active member to pensioner ratio increasing for the first time in many years to 0.96. However, the active member to pensioner ratio remains amongst the lowest in the country. Each year, approximately $150-$200 million more in pension benefits is paid out than is collected by way of contributions from active members and employers. This places an ongoing and unfair burden on active members paying high contribution rates.
“While there is no immediate risk that the Plan will be unable to meet its ongoing pension obligations, TPPTI continues to urge the Plan Sponsors to act decisively and effect amendments that will improve the Plan’s long-term financial sustainability,” added Rogers.
In October 2020, the Plan Sponsors, the Province of Nova Scotia (Province) and the Nova Scotia Teachers Union (NSTU), agreed to jointly appoint an independent panel of pension experts (NSTPP Panel) to review the ongoing challenges facing the Plan. The NSTPP Panel’s mandate is to review and analyze the Plan, educate and consult with stakeholders, and make non-binding recommendations to fully fund the Plan within a reasonable period of time. In August 2022 the TPP Panel’s non-binding recommendations were submitted to the Province and the NSTU for review and consideration.
To read the full 2022 Teachers’ Pension Plan Annual Report, visit the Plan’s website at:
https://www.nstpp.ca/investments/plan-performance
-30-
For more information, contact:
Gisèle March
Senior Communications Advisor
Nova Scotia Pension Services Corporation
C: 902-240-3244 | taylorgd@nspension.ca