Board Communique: May 30, 2019
The plan’s funding ratio is 106.1 per cent
The College Pension Plan’s (plan’s) most recent valuation, measured as at August 31, 2018, shows the plan has actuarial assets of $5.2 billion and actuarial liabilities of $4.9 billion. This means the money available for current and future pensions exceeds the projected costs of paying for those pensions, and the plan is in a surplus situation with a funding ratio of 106.1 per cent.
What is the plan doing with the surplus?
When there is a valuation surplus, we, the College Pension Board of Trustees (board), use the College Pension Plan Joint Trust Agreement (JTA) to help guide our decisions in the use of that surplus.
The JTA is a document established by the plan partners (the Federation of Post-Secondary Educators of BC, the BC Government and Services Employees’ Union, the Post-Secondary Employers’ Association and the Government of BC). It acts as a governance framework for the plan, giving us guidelines on how to manage the plan.
Having received the valuation report this May, we are now carefully examining the options available to us under the JTA. It is important that whatever decision we make is sustainable and equitable to members and employers. We will notify members and employers when a decision has been made.
Why is there a surplus?
The surplus was mainly the result of investment returns being higher than expected over the last decade.
What is a valuation and why is it important?
At least every three years, an independent actuary (a professional with specialized knowledge in finance, statistics and risk theory) performs a valuation. The valuation helps us assess the financial position of the plan and its funding requirements to ensure there are enough funds available for the current and future pensions of all members, whether active, inactive or retired.
Getting a regular valuation checkup is just one of the steps we take to ensure the plan maintains its value and remains healthy and sustainable. Check back for a future announcement on how the plan’s surplus funds will be allocated. To read the full valuation report, visit the Reports page under About us on the plan website.