Teachers who retired after August 1, 2006 will not receive indexing this year due to pension troubles.
The Nova Scotia Teachers’ Pension Plan has fallen to a 70.8 funding level – far below the 90 per cent cut off for indexing. The level represents more than $1 billion of unfunded liability.
Most teachers who retired prior to August 1, 2006 are not affected. They will receive indexing beginning in July at a rate of the Consumer Price Index minus one per cent.
But according to the 2005 agreement between the province and the union, pensioners who retired after the summer of 2006 can’t get indexing until the plan is at least 90 per cent funded.
The province will make a contribution to the Nova Scotia Teachers’ Pension Fund equal to the actuarial value of indexing not paid. The amount is estimated at $3.5 million.
The Nova Scotia Teachers’ Pension Trustee said that while things are bad, they could have been worse. The Nova Scotia plan had an investment return of negative 16.8 per cent for the 2008 calendar year. The Trustee said Canada’s biggest pensions averaged an investment of negative 18.4 per cent.