Dalhousie Pension Plan
Dalhousie University’s defined benefit pension plan means a great deal to all of us. It’s part of what makes Dalhousie such an attractive place to work and allows our employees to be supported and more secure in their future retirement.
It’s vital that our pension plan stays financially healthy, delivering returns that ensure it can fulfill its obligations to all plan members. A healthy pension plan also ensures that we can protect operating funds that pay for salaries and services today.
What is a defined benefit plan?
A defined benefit plan delivers a defined retirement income based on a specific formula related to your annual earnings. And that income lasts throughout retirement, which makes budgeting for retirement much easier.
For more information on Dalhousie’s defined benefit plan, please see the pension summary section.
How is my pension calculated?
You earn your pension benefit at a rate of two percent per year of pensionable service in the plan. To calculate your pension benefit, this amount is multiplied by the average of your best three years of earnings at Dalhousie. Any income you receive through the Canadian Pension Plan is in addition to your Dalhousie Pension Plan.
Is my pension adjusted for inflation?
The plan adjusts pensions annually for inflation (referred to as indexing) when:
(i) it earns enough investment income (annual indexing), and
(ii) there is sufficient surplus to pay for it (discretionary catch-up indexing).
For a detailed description of how your pension will be calculated, please see the pension summary section.
How is my pension plan structured?
Our pension plan is supported by two funds: one you pay into while working and one that pays out pensions for retirees. When you retire, money is transferred from the first fund into the second. Dalhousie’s current two-fund system is not the norm; most pension plans have a single pension fund.
How does the two-fund structure impact funding levels?
The two-fund structure, and the specific requirements regarding the transfer of dollars from one fund to the other, makes it a challenge to fund the overall plan to 100 percent. When our plan is underfunded (less than 100 percent), we are required to divert resources from the operating budget to cover the shortfall. In the past five years, Dalhousie has spent $30 million on funding the pension shortfall.
How is my pension plan managed?
The Pension Plan has many moving parts to ensure it continues to operate successfully now and into the future.
Dalhousie University has a structure in place for the governance and administration of the Plan that consists of the Board of Governors, the Pension Advisory Committee (PAC) and Fund Trustees.
- The Board of Governors acts as the Administrator of the Plan, monitors the investment of the Plan assets, amends Plan rules subsequent to PAC recommendations, collects and deposits member contributions and contributions from the employer, as well as maintains all necessary administrative records.
- Pension Advisory Committee (PAC) considers matters relating to pension benefits and the administration of the Plan and makes recommendations relating to the administration of the Plan and the Plan design. The committee also seeks to promote awareness and understanding of the Plan among its members.
- PTF/RTF Trustees implement investment policies to align with the Plan’s obligations, oversee fund investment management and monitor the investment managers. The Trustees’ primary focus is on the actuarial return targets required to meet the benefit objectives. The investments have met and exceeded the respective return targets over the last 24 years since the plan last enjoyed a strong surplus position. The Trustees also review and consider discretionary or catch up indexing.
- The Plan also utilizes the services of an actuary to determine the financial position of the Plan (how much money there is in the Plan (the Plan’s assets) and how much money the Plan needs to pay out the benefits promised (the Plan’s liabilities)). The actuary also establishes the minimum and maximum contributions to the Plan until the next valuation and ensures the Plan meets the statutory filing requirements under the Nova Scotia Pension Benefit Act as well as the Canadian Income Tax Act.