N.S. teachers' pension plan deficit grows, prompts review
Unfunded liability of Nova Scotia Teachers' Pension Plan increased to $1.6B in 2018, up from $1.4B in 2017
A legal expert who helped nurse the Nova Scotia government employees pension plan back to health has been asked to do the same for the troubled Nova Scotia Teachers' Pension Plan.
Kathryn Bush, a partner at a Toronto law firm, was heavily involved in changes to Nova Scotia's Public Service Superannuation Plan between 2010 and 2012.
The pension plan for government employees was in the same $1.6-billion hole as the teachers' plan in 2008.
In 2017, the government pension plan reported a surplus of almost $240 million.
NSTU president Paul Wozney is hoping for a similar turnaround.
"The plan changes that she [Kathryn Bush] helped orchestrate have significantly improved the fiscal health of that plan," he said.
"The [provincial] auditor general kind of holds it up to say this is kind of where pensions should be in Nova Scotia."
According to the 2018 annual report released Monday, the Nova Scotia Teachers' Pension Plan was only 75.3 per cent funded at the end of 2018, down from 78.4 per cent the year prior.
Why the pension plan had a rough year
Plan trustees attributed the decline to payouts being larger than contributions and "flat investment returns."
That brought the unfunded liability to $1.6 billion, up from $1.4 billion in 2017.
Trustee chair John Carter tried to sound reassuring in his message to plan holders.
"While there is no immediate risk that the plan will be unable to meet its ongoing pension obligations, it is important to note that the plan's financial position could further deteriorate going forward unless the plan sponsors take significant steps to address these challenges," Carter wrote in the report.
In a memo, also released Monday by the Nova Scotia Teachers Union, the union and the Nova Scotia government have agreed to increase the number of days retired teachers can substitute in the classroom from 70 days to 100 days.
This new maximum affects this school year and the next one. Once a retired teacher works over the maximum number of days, they lose their pension for the rest of the year.
Wozney didn't expect the increase to affect new teachers looking to get work because, according to him, the number of substitute opportunities far outstrips the number of teachers looking to take substitute work.
Labour Relations Minister Mark Furey told CBC News in a statement that funding the teacher's pension plan is a "complex issue that will take significant effort to resolve."
"There are no easy answers. There is no risk that the plan will not meet its obligations in the short or medium-term, but now is the time to act so that it is funded for the long-term," Furey said.
Furey said the provincial government is "committed to working with the plan trustee and the NSTU on a course of action that is as fair and equitable as possible for pensioners and current employees, as well as responsible for Nova Scotia taxpayers."
Bush will be paid for her work from money in the Nova Scotia Teachers' Pension Fund.