Plan Funding

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and Analysis

Funding Model

PSPP pension benefits are funded by investment returns, along with employer and employee contributions. PSPP has established policies and processes to manage the funding model.

PSPP’s Funding Policy directs the setting of benefits, contribution rates, and investment risk tolerances. The Investment Policy directs the key capital market and implementation considerations underlying the investment program.

“I’m very grateful to have a retirement benefit that provides financial security without requiring active management. I recognize that this is a privilege not available to many.”

- Shelley E.

“PSPP means I can have dignity in my retirement and old age and may be able to do a little bit to help those I love who will not have the same dignity and security like my sibling.”

- Marie T.

Funding Objectives

PSPP has adopted a framework to ensure that accumulated assets and future contributions are sufficient to meet all future benefits on an ongoing basis.

Funding Principles

PSPP’s Funding Policy highlights funding objectives and controls, and accounts for key factors relevant to the Plan.

Benefit Security

A commitment to remaining well-funded serves to facilitate the ongoing delivery of Plan benefits.

Intergenerational Equity

Attention to fairness in sharing the cost of benefit funding preserves equity across cohorts over time.

Contribution Rate Stability

By applying reasonable expectations of funding from contributions and investment returns, we aim for reliable contribution levels.

The policy also outlines the frequency of actuarial valuations. The valuation process is central to investment and contribution rate decision-making in support of meeting Plan funding objectives.

Investment Objectives

Investment returns are expected to be the primary source of benefit funding. The investment program aims to determine the appropriate level of risk in capital markets within the context of the Plan funding model.

Investing in capital markets involves decision-making under uncertainty. To manage the risks of seeking returns, PSPP has adopted an industry best practice investment decision framework highlighted by the visiting and revisiting of key decisions.

Key elements of the framework include the asset mix decision, development of broad investment policy, and oversight to the implementation of the investment program.

Portfolio construction involves building an investment portfolio that is in line with established objectives and risk tolerances.

Long-Term Investment Results

The pension funding model’s sustainability is monitored through regular actuarial valuations. A valuation establishes assumptions related to the long-term expected return from the investment portfolio.

Actual Investment Returns vs.
Long-Term Expected Return For Funding.

Over the last 20 years, actuarial assumptions for expected annual portfolio returns, including a margin for conservatism, have averaged 6.3%. The Plan’s actual long-term investment returns have exceeded these expectations. This means that the long-term objectives of the pension funding model have been met.

Funded Status and Contribution Rates

The most recent actuarial valuation that was filed with the regulators was completed as at December 31, 2024 and reported that the Plan was well funded with assets sufficient to fund 119.9% of pension obligations. Current analysis indicates that the Plan continues to be well funded.

Funded Status

Over this period investment returns exceeded expectations, increasing the surplus and the resulting funded status. The trend in funded status impacts funding requirements and the regular review of contribution rates.

Contribution Rates

Contribution rates are established as a percentage of a member’s pensionable earnings. Contributions are split between the member and employer, each paying an equal portion of the total rate.

Contribution rates have been trending downward over the past 13 years to the current combined rate of 17.91%.

Changes to contribution rates flow through the processes supporting the ongoing attention to Plan funding.

Contribution rates payable by both the member and employer will remain unchanged for 2026.

% of pensionable earnings

8.3%

Up to YMPE*

11.9%

Above YMPE*

The contribution rate for earnings up to the YMPE is lower than the contribution rate for earnings above the YMPE. This reflects PSPP’s benefit formula which provides a larger benefit for earnings above the YMPE.

The total contribution rate of 17.91% is an aggregate of the contribution rates applied to pensionable earnings both up to and above the YMPE and contributions made by both the member and employer.

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Management Discussion and Analysis

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Plan Funding

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Investment Performance

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Plan Financial Highlights

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Pension Administration

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