Friday, 27 July 2012

Support Staff: Contribution Rate Increase

The Public Service Pension Plan (PSPP) announces a contribution rate increase effective January 1, 2013 for both employees and employers.

Current Contribution RatesContribution Rates Effective January 1, 2013
Up to YMPE: 9.90%Up to YMPE: 11.70%
Over YMPE: 14.14%Over YMPE: 16.72%
Year's Maximum Pensionable Earnings under the Canada Pension Plan.(2012 YMPE = $50,100)

This increase stems from the results of a December 31, 2011 actuarial valuation. The Board uses actuarial valuations to get an overall assessment of the Plan's financial health and an accurate picture of its assets and liabilities. The purpose of a valuation is to make sure the earned benefits are secure. This is done by ensuring the Plan has sufficient assets to cover its obligations to pension holders.

The latest valuation shows an unfunded liability of close to $2.1 billion. As a result, the Board increased contribution rates based on the recommendation of the Plan's actuary.