One of the key indicators of the financial health of a pension plan is its funded status. The TSF performs an annual valuation of the plan’s liabilities and assets in order to determine the funded status. Under the TSF plan design, the plan’s funded status is particularly important as it also determines the amount of inflation protection the plans may provide in any given year.
The TSF provides inflation protection, to a maximum of the rate of increase in the Consumer Price Index (Canada All Items) for retirees, as long as the plan is over 110% funded.
The plan also provides inflation protection, to a maximum of the rate of increase in the Canadian Average Industrial Wage (AIW) for active members, as long as the plan is over 100% funded.
As inflation protection is contingent on the plan’s funded status, the following table will help you keep track of this key indicator.
|Report Date||Funded Status (%)|
|April 1, 2018||120.1|
|April 1, 2017||118.0|
|April 1, 2016||115.6|
|April 1, 2015||123.5|
|April 1, 2014||123.3|
|January 1, 2014||121.4|