Changes that support the sustainability of the plan
Learn more about changes that will help stabilize contribution rates and provide inflation protection for your pension.
Improving long-term financial sustainability
Because of plan changes, the long-term sustainability of the plan will improve with stabilized contribution rates and strengthened inflation protection to support cost-of-living adjustments over the long term.
Stabilizing contribution rates
A rate stabilization account (RSA) was created in 2016 with surplus funds from the 2015 actuarial valuation. The RSA has grown to $2.5 billion through investments.
There is also an inflation adjustment account (IAA), funded by member and employer contributions, that earns investment income.
The new terms of the Joint Trust Agreement include provisions for future surpluses to be used to support the RSA and the IAA as priorities (after first paying off any funding shortfalls) until they reach target funding levels.
Strengthening the inflation adjustment account
The plan changes will strengthen the IAA with future surpluses being used to resolve any funding shortfalls. The surpluses will be shared equally between the IAA (to further support inflation protection) and the RSA (to reduce the likelihood of contribution rate increases for active members and employers). In other words, future surpluses will be used to benefit retired and active members.