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Is my NPF pension safe?
Gerry Green, Director Human Resources Programs, CFPSA, Ottawa, 613-995-7567, green.gerry@cfpsa.com
Periodically, you’ve read in newspapers about the troubled state of pension plans in Canada following the stock market crash of 2002. We hear about deficits in the solvency ratio, reductions in pensions and increased payments by employees. You have, perhaps, also wondered, is my NPF Pension safe?
The NPF Pension Plan was affected by the stock market and over the past three years the Employer has been required, by federal legislation, to increase their pension contributions due to the deficit in the solvency ratio. As of the end of December 2005, the Pension Plan had assets of $100.7 million, but its liabilities were $104.4 million for a solvency deficit of $3.7 million. This deficit is not of concern, since the total liabilities represent what each current and retired employee is eligible to receive from the pension plan for many years into the future. Despite this, NPF is committed to eliminating the deficit and will continue to make extra payments to the Pension Plan in order to increase the assets to the same value as the liabilities. In fact, for 2006, NPF will make extra payments of $1.3 million. In addition, for every $1.00 you as an employee contribute NPF will contribute $2.00.
Despite the requirement to make these extra payments, NPF does not intend to either reduce your pension, or to increase your level of contributions. It should be noted that your pension plan does not include guaranteed indexation, but NPF can approve increases when the solvency of the plan will allow. In light of the extra payments, however, NPF has not approved pension-indexing increases for 2005 and 2006.
Is my NPF pension safe? Yes, indeed it is.
For more information on your pension plan, please go to our website: www.cfpsa.com/en/services/hrservices.
