Plan’s Financial Health Continues to Improve
Earlier this year, the Saskatchewan Teachers’ Federation filed a funding valuation as at July 1, 2019. The purpose of a valuation is to gauge the overall health of a pension plan by determining if it will have enough money to pay future pensions on a long-term basis. The July 1, 2019 valuation showed that the Saskatchewan Teachers’ Retirement Plan’s funded status (the amount of money we have to pay future pensions) had improved from 97.4 percent in 2017 to 98.7 percent in 2019. The Plan’s funding deficit (the shortfall of assets needed to pay future pensions) improved from $134.6 million to $98.7 million. The improvement is due in part to strong investment returns in recent years.
All registered pension plans in Canada are required to file a valuation with provincial and federal regulators at least every three years. When a valuation is filed, we are required by law to fund the Plan based on the results of that valuation. Given the funded status for STRP has improved at July 1, 2019, no changes to member contribution rates or pension benefits are needed at this time.
The improvements to the funded status are a strong signal that the Plan is healthy. Although we have experienced some market volatility over the last several months due to the COVID-19 pandemic, pension plans are long-term in nature and the STRP’s funds are well-diversified in order to minimize market volatility and reduce exposure to excessive risk. At this point in time, the Plan remains in good financial health.