Pandemic Volatility Doesn’t Change Long-Term View

July 15, 2020

The COVID-19 pandemic has led to volatility in the financial markets. You may have questions about how the resulting economic downturn will affect your pension. Remember, one of the advantages of your pension plan is that investment results do not directly impact your pension amount. Instead, your pension is calculated using a formula that takes into account your years of service and your earnings.

The Pension and Benefits Board of Directors, the Investment Committee and the STF are focused on maintaining the sustainability of your benefits. While the economic downturn may have some short-term effects on funding levels, the nature of funding pensions requires investing over long-term time horizons – 50-plus years into the future. Our funds are well-diversified to minimize the effects of market volatility and reduce exposure to excessive risk. Our team continues to monitor the situation on a daily basis and look for opportunities to enhance investment returns while at the same time managing our risk levels within the portfolio.

In April, 2020, the Saskatchewan Superintendent of Pensions instituted a freeze on all lump-sum transfers out of pension plans due to solvency concerns stemming from COVID-19 and related market volatility. However, the Federation applied for and received an exemption from this freeze as the Superintendent deemed the Plan to be low-risk. This means we can continue to pay out pension benefits as normal.