March 10, 2011
For the past year, the Funding Task Force (composed of OPSEU and College representatives) has carried out research and investigations into funding alternatives to address pension plan funding deficits expected in the actuarial valuation as of January 1, 2011.
Like many other pension plans, the CAAT Plan has had funding challenges. In addition to economic changes the average member is living longer and the plan needs to assume extra pension payments per member. The deficit created by recent investment losses and low interest rates continues to be managed with steps already taken.
After a thorough review of alternatives, the Funding Task Force has made a recommendation to the Trustees and Sponsors Committee. They have approved an increase in contributions in order to help secure future benefits. Contribution rates will increase by a total of 1.6% for members and the colleges over the next three years.
Rate increases will be phased in over 3 years as follows:
January 1, 2012 - +0.8%
January 1, 2013 - +0.4%
January 1, 2014 - +0.4%
Also being introduced in 2012 is a change to the way contributions are calculated. Members will contribute at a lower rate on the first $3,500 of their earnings in a year.
Additional information on the Funding Task Force's deliberations and the contribution changes may be found at: www.caatpension.on.ca/en/members/member-newsletters.