All Saskatchewan teachers belong to one of two pension plans described below, depending on when they began their teaching career.
Saskatchewan Teachers’ Retirement Plan
The Saskatchewan Teachers’ Retirement Plan provides pension benefits to Saskatchewan teachers who began teaching in the provincial PreK-12 system after July 1, 1980. It is a defined benefit plan, which means pensions are determined by a formula that is based on a teacher’s service and earnings.
The STRP is designed by teachers for teachers and it is administered by the Saskatchewan Teachers’ Federation.
Changes to Your Pension Plan Effective July 1, 2018
The STF Executive has approved two changes to the Saskatchewan Teachers’ Retirement Plan, effective July 1, 2018. These changes are required to ensure the Plan remains compliant with federal pension legislation.
More information is provided below regarding:
In addition, as you’ll be contributing less to the pension plan and the interest rate credited to your required contribution account may be lower, the likelihood of any excess contributions being paid when you leave the Plan may be lower. Members are entitled to a refund of any excess contributions upon retirement, termination and death.
After filing the July 1, 2016 funding valuation with the pension authorities, the Federation received notice from the Canada Revenue Agency (CRA) that steps must be taken in order for the STRP to comply with the Income Tax Act.
Federal pension laws restrict the level of contributions to a registered pension plan in order to limit the amount that can be tax-sheltered. As such, employee pension contributions are generally limited to 9% of pay. As some plans require employee funding in excess of 9%, CRA may waive this limit if the plan passes a “waiver test.”
To pass the waiver test it must be shown that, over the long term, total member contributions plus interest will not exceed 50 percent of the amount needed to fund the benefits promised.* The waiver test is applied regardless of whether or not employer pension contributions are negotiated – as is the case for the STRP.
When the July 1, 2016 funding valuation was filed, the STRP did not meet the requirements of the waiver test. However, CRA advised that a waiver will be granted until 2020 in order to give the Plan time to take the necessary steps to comply with applicable legislation.
The STRP Board of Directors and the STF Executive are confident the Plan changes effective July 1, 2018 will address CRA’s directive and protect the long-term sustainability of the Plan.
An increase in government contributions would also help address CRA’s maximum employee contribution limit and waiver test. The government contributes a fixed percentage of teachers’ salaries to the STRP. The Federation continues to advocate for additional government contributions through the collective bargaining process.
The Board has filed a funding valuation as at July 1, 2017, which reflects the changes to the Plan effective July 1, 2018.
*This is a simplified description of the “waiver test.”
A funding valuation as at July 1, 2017 has been filed with the regulatory authorities. By filing a valuation two years earlier than required by legislation, the pension fund is able to lock in the investment gains experienced over the last year, and proactively address the Canada Revenue Agency’s directive before the waiver expires. (See Why Changes Are Required.)
In summary, the pension plan’s “rainy day” reserves have been strengthened and the deficit reduction strategy is on target. All factors considered, STRP’s funding deficit has decreased by $54 million over the last four years, from $189 million in 2013 to $135 million as at July 1, 2017.
The following video provides an overview of your STRP retirement benefits.
Teachers who participated in the former Teachers’ Annuity Plan between July 1, 1980, and June 30, 1991, are required to have a minimum amount of service after June 30, 1991, to be eligible for a defined benefit pension from the STRP.
Saskatchewan Teachers’ Superannuation Plan
This section, including the contents of linked publications, contains general information only. In the event of any discrepancy in interpretation, error or omission, the applicable legislation and Plan Text are the final authority.