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ACTUARIAL VALUATION REPORT
by Vestcor
Actuarial Valuation Reports are required to be conducted by the Plan’s actuary every three years. In the years when the Report is not required, a Cost Certificate is prepared by the Plan’s actuary in lieu.
The Plan’s most recent Actuarial Valuation Report was prepared as at August 31, 2022. It was subsequently reviewed and approved by the Board of Trustees on March 28, 2023. In preparing the Actuarial Valuation Report, the Plan’s actuary compares the money in the pension plan (i.e., the Plan’s assets) with an estimate of the total value of benefits earned by all plan members (i.e. Plan’s liabilities) as of the valuation date. The Plan’s liabilities are estimated using a number of economic and demographic assumptions.
The most recent Actuarial Valuation Report outlines:
• A Funding Valuation Ratio of 112.4%, up from 108.9% in the last Actuarial Valuation Report conducted as at August 31, 2019. This ratio compares the fair market value of the Plan’s Assets to the Plan’s Liabilities, assuming the Plan will continue indefinitely (i.e., how funded the Plan is).
• The Risk Management Test Result has also increased to 99.90%, from 99.65% in 2019, exceeding the required goal of 97.50%. This ratio determines the ability to provide long-term benefits to its members without reductions, and is therefore a measure of the security of benefits. It is also used as guidance in setting the investment policy, and when adjustments may be needed to help preserve the longterm financial health of the Plan. These required calculations are outlined in the Plan’s Funding Policy.
Copies of the Plan’s Actuarial Valuation Reports and Cost Certificates are available at nbtpp.ca
Indexing Adjustment Benefit
In accordance with the NBTPP governing documents, when in a position to do so, the Plan provides for an annual Indexing Adjustment Benefit (IAB) each year. The IAB is based on the Consumer Price Index (CPI) as determined by Statistics Canada. For the 12-month period ending June 30, 2022 the increase in the CPI was 5.56%. Active members were awarded a 4.75% increase to their benefits earned up to December 31, 2021, the maximum IAB allowed as per the Plan Text. Retirees had 75% of the CPI applied to their monthly benefits, effective January 1, 2023, up to a maximum of 3.56% (as per the Plan Text). For retired or deferred members of the NBTPP who terminated during 2022, a blended rate was calculated based on the number of months the member was active and the number of months the member was retired.
Actives 4.75%
Effective Jan. 1, 2023
Retirees 3.56%
Effective Jan. 1, 2023
