Member news: February 8, 2021
The WorkSafeBC Pension Plan is financially healthy and strong: latest valuation results now available.
Note added July 12, 2021: The contribution rates content on this page has been updated.
We are pleased to announce the most recent WorkSafeBC Pension Plan valuation as at December 31, 2019 shows the plan funding ratio is 127.8 per cent. This means the WorkSafeBC Pension Plan is financially healthy and strong.
What is a valuation?
A valuation measures money going out of and coming into the plan, or the plan’s assets and liabilities. Assets include plan funds, future contributions and anticipated investment returns. The plan’s actuary compares these assets against liabilities, which are paid out as pension benefits in the future. An actuary is a specialist in financial modelling, statistics and risk management.
As required by provincial legislation, the plan actuary assesses the plan from two perspectives: going concern and solvency:
- The going-concern valuation assumes the plan will continue into the future at least as long as the lifetime of all current members. It showed an actuarial surplus of $404 million in the basic account. This represents a funded ratio of 127.8 per cent, meaning the plan is in a strong position.
- The solvency valuation measures the ability to pay out pensions if the plan had shut down December 31, 2019. It showed an actuarial surplus of $86 million in the basic account. This represents a funded ratio of 104.6 per cent, meaning the plan would have had enough funding to pay out all pension benefits.
What this means for you
Your contribution rate will not increase because of this valuation.
The valuation results showed the plan has a surplus (its assets exceed its liabilities). Where the plan has a surplus, the plan rules allow WorkSafeBC to use the accessible going concern excess (which is about $331 million of the surplus) to reduce contributions. WorkSafeBC will be using approximately $11.2 million of that excess each year until the next valuation, due as of December 31, 2022, to keep contributions in the basic account for you and WorkSafeBC at current rates and cover the expected cost of benefits accruing.
Inflation adjustments for retired members
Annual inflation adjustments to retired member pensions are a valuable benefit of the plan, but they are not guaranteed. The valuation showed the plan’s inflation adjustment account remains well funded, and we anticipate retired plan members will continue to receive annual inflation adjustments in line with the annual changes in the Canadian consumer price index.
As your Pension Committee, we work professionally, responsibly and proactively to ensure the health of your plan. Valuations are conducted at least once every three years to ensure the plan is financially stable. Last year, WorkSafeBC made a plan rule amendment to change its valuation review date to December 31, 2019 from March 31, 2020. This change helps to offset the impacts of the market volatility and interest rate changes. The next valuation will be conducted as at December 31, 2022.
To read the full valuation report, visit the reports page.