HALIFAX, NS - September 11, 2024 - The Board of Directors (the Board) of Public Service Superannuation Plan Trustee Incorporated has approved in concept the addition of new levels of participation in the Public Service Superannuation Plan (the PSSP or Plan).*
Employers will be able to participate in the PSSP at different contribution rates having a corresponding pension accrual rate. All other terms of the Plan will apply. This proportionate approach to PSSP participation, being called PSSP VANTAGE, will produce fair and equitable results for both current and future members – benefits earned will always be commensurate with payments made – while still facilitating Plan expansion and offering the advantages of a defined benefit pension plan to entirely new industries and sectors within the Province.
“The dual objective of these changes is to enable and encourage broader participation by Nova Scotians in the PSSP – a century-old, secure defined benefit pension plan that is managed here in Nova Scotia – and to continue to grow the Plan membership and thereby enhance its overall strength and stability,” stated Board Chair, Leo McKenna.
The guiding principles for membership growth are that such growth must enhance the long-term sustainability of the Plan and be cost neutral to existing members. Those principles will continue to apply in respect of the incorporation and application of PSSP VANTAGE.
Details regarding the admission of employers to new participation levels and the ability of employers to shift between participation levels continue to be refined by the Board and will be released in due course. However, a preliminary Q&A document is attached to this media release.
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For more information, contact:
Gisèle Taylor, Senior Communications Advisor
Nova Scotia Pension Services Corporation
taylorgd@nspension.ca | www.novascotiapension.ca
*The reviews of the PSSP conducted in 2017 and 2022 both recommended the pursuit of further growth opportunities for the Plan, with the 2017 review expressly recommending consideration being given “to devising lower cost benefit options within the Plan…”. These comprehensive independent reviews are mandated by the Public Service Superannuation Act, and the Board is empowered by the Act to directly implement some review recommendations.
PSSP VANTAGE – Q&As
Q: What is PSSP VANTAGE?
A: PSSP VANTAGE is an expansion of the existing PSSP to accommodate new levels of participation. It is geared towards employers/employees who may not be able to afford the PSSP’s current ‘full’ contribution rates but are aspiring to be part of a defined benefit (DB) pension plan. PSSP VANTAGE will be structured to offer contribution/accrual rates at 80% and 60% of today’s ‘full’ rates.
Q: Why pursue further expansion of the PSSP?
A: (1) The more the PSSP expands, the financially healthier it becomes (thereby likely improving the probability and quantum of future CPI adjustments).
(2) Expansion to new employers/employees in Nova Scotia benefits individual Nova Scotians and the Province as a whole by providing enhanced retirement security to more citizens through participation in a large DB pension plan that is professionally managed and overseen by an engaged, local trustee board.
Q: Other than proportionately reduced contributions and pension benefits, will participants in PSSP VANTAGE otherwise derive the same advantages of participation in the PSSP as all other Plan members?
A: Yes, all terms of the PSSP apply to Plan members no matter at what level they participate. Aside from the different contribution rates and corresponding pension accrual rates, PSSP VANTAGE employers and their employees will enjoy all other attributes of the PSSP, including: a guaranteed pension amount based on the employee’s highest average salary across their 5 best years, early retirement options, a bridge benefit from retirement to age 65, generous spousal, children’s and estate benefits, the potential to purchase service held in a prior registered pension plan, and contingent indexing (cost-of-living allowance) for pensions in pay.
Q: Is PSSP VANTAGE fair for new members coming into the PSSP at one of the new participation levels? Is it fair for existing Plan members? Are existing Plan members (or new members at LEVEL 1.00) subsidizing new members participating at LEVEL 0.80 and LEVEL 0.60?
A: The Plan’s actuary completed analysis showing the proportionate approach regarding the new levels in the PSSP is perfectly fair to all members. Everyone receives what they pay for – no more and no less. No member subsidizes any other member, and no member gets any sort of windfall.
Q: Will employers be able to enroll different employee groups in the PSSP at different participation levels?
A: Yes, employers will be able to enroll different employee groups in the PSSP at different participation levels. However, it should be noted that several criteria will need to be satisfied prior to any new admission to the Plan. All costs relating to an employer joining the PSSP (both the employer’s and the Trustee’s) will be the responsibility of the employer.
Q: What criteria will be used to assess whether an employer is granted admission to the Plan?
A: As a minimum, the following will be required from an employer in assessing whether it is granted admission to the Plan:
- confirmation by the employer that it has provided to its affected employees reasonably detailed material and analysis regarding what PSSP participation will mean for them and ample time to consider the implications of joining the PSSP
- confirmation from the employer that it has held a vote of affected employees, and that vote produced a result whereby no more than one third of those voting cast a vote against joining the PSSP
- if any of the affected employees are represented by a bargaining agent, confirmation by the employer that it has obtained the consent of the bargaining agent to the affected employees joining the PSSP and, if a collective agreement is in place, that the collective agreement has been duly amended (and ratified, if necessary)
Q: Will an employer be able to prospectively change its PSSP participation level or levels (if it has different participation levels for specific employee groups)?
A: Yes, employers will be able to prospectively change participation levels, or the participation levels of specific employee groups. However, it should be noted that several criteria – including confirmation regarding provision to affected employees of detailed material and analysis, that a vote of those employees has been held and showed no more than one third of those voting cast a vote against the proposed change of participation level, and that any employee bargaining agent has consented – will need to be satisfied prior to any change of participation level and all costs associated with such a change (both the employer’s and the Trustee’s) will be the responsibility of the employer.
Q: Can a change of participation level be up or down?
A: Yes, a change of participation level may be up or down. As discussed above, any change in participation level will have some cost and timing implications, so should not be undertaken lightly. To this end, when joining the PSSP employers will be encouraged to place themselves at a participation level or levels that they assess to be sustainable. Changes in participation level are anticipated to be relatively infrequent across the Plan over time.
Q: Will PSSP VANTAGE be available to employers who transfer assets and liabilities to the PSSP pursuant to the University Pension Plan Transfer Act (UPPTA), the Municipal and Other Authorities Pension Plan Transfer Act (MOAPPTA), or the Private Sector Pension Plan Transfer Act (PSPPTA)?
A: Any plan transferring in may consider the options provided by PSSP VANTAGE. The normal requirements under UPPTA, MOAPPTA and PSPPTA will still need to be met. PSSP VANTAGE will also have various criteria that need to be satisfied by an incoming employer.
Q: When is PSSP VANTAGE expected to be operational?
A: While PSSP VANTAGE has now been approved in concept by the Trustee and implementation steps have commenced, there remains significant additional work to be completed at the operational level before the Plan can begin admitting participants.
The PSSP’s administrator, NS Pension, is available to discuss PSSP VANTAGE with interested employers. Although, as indicated, admission to PSSP VANTAGE is not immediately available, discovery meetings, Trustee approvals, and contract development can begin now. Through the coming months, NS Pension will be preparing to onboard employers into PSSP VANTAGE, and the Trustee will be making necessary amendments to the PSSP’s plan text.