CAAT Plan remains resilient through a tumultuous year
The CAAT Pension Plan stands 119% funded on a going-concern basis, with a funding reserve of $3.3 billion, based on its latest actuarial valuation as at January 1, 2021.
There is no change to the benefits you are earning, and the granting of conditional benefit enhancements have been extended to at least 2024. The secure defined benefit pension you have earned is not affected by investment market fluctuations. Our Plan remains strong.
The Plan is currently 119% funded. That means we have set aside $1.19 for every dollar of pension earned by our members.
This year, the Plan’s discount rate was lowered to 4.95% from 5.15%. That means that every year the investment returns are over 4.95%, the Plan’s funded health will improve. The lower discount rate is consistent with the CAAT Plan’s focus on benefit security and sustainability, and reflects the asset mix, expected long-term market returns on the investment portfolio, and the Plan’s risk tolerance.
Reserves strengthen benefit security
Based on the Plan’s Funding Policy, the Plan governors determined that allocating additional reserves to further strengthen benefit security is the most prudent option at this time. Funding reserves maintain the Plan’s resilience and cushion the Plan against future economic or demographic shocks.
The valuation will be filed with the regulator in the coming weeks and posted to the Plan’s website. By opting to file this valuation this year, the Plan will not be required to file again before 2024.
The actuarial valuation compares the CAAT Plan’s liabilities – the pensions earned by members, and the estimated pensions that will be earned in the future – to the assets of the pension fund and estimated contributions to be received.
The 2021 Valuation has been filed. Download the 2021 Valuation Report (PDF)
Read the 2020 Annual Report (PDF)
At the beginning of 2020, the CAAT Pension Plan was 118% funded on a going-concern basis, with $2.9 billion in funding reserves plus additional asset smoothing reserves of $0.8 billion. Our thoughtful design, long-term focus, and large reserves are key factors in CAAT being one of the most sustainable pension plans in Canada. Our stability provides peace of mind in an uncertain world.
The secure defined benefit pension you have earned is not affected by investment market fluctuations. There is no change to the benefit you are earning, and the granting of conditional benefit enhancements have been extended to at least 2023. Our Plan remains strong.
Growth initiatives contributed to Plan health through 2019. CAAT’s Growing Plan Membership strategy – which saw a significant increase in the number of employers and members in the past year – contributed $0.4 billion to Plan reserves in 2019. Welcoming more employers and members will continue to strengthen the Plan.
The Plan is currently 118% funded. That means that for every dollar of pension earned by members, there is $1.18 set aside to pay it.
This year, the Plan’s discount rate was lowered from 5.5% to 5.15%. That means that every year the investment returns are over 5.15%, the Plan’s funded health will improve. The 2020 funded ratio is slightly lower, but the likelihood that the funded status will grow in the future has increased. The Plan’s lowering of the discount rate is consistent with its focus on long-term benefit security and sustainability. CAAT maintains a healthy funding reserve and uses realistic valuation assumptions to ensure the pension promise remains strong.