pspp annual report 2018
Consist of minimum benefit payments and return of contribution payments at death. A portion of such instruments has maturities of 90 days or less and is held to meet short term financial commitments. Such fees are embedded in the fair value of the funds. For unfunded pension benefits, the discount rate disclosed in the table reflects the equivalent flat discount rate. The public service pension plan is a defined benefit pension plan that is funded by contributions from members and the Government of Canada. PSPIB does not sell, repledge or otherwise use any collateral held in the form of securities but does reinvest all cash collateral, with respect to derivative contracts. Contributions and benefit payments in excess of limits permitted under the Income Tax Act for registered pension plans are recorded in the Retirement Compensation Arrangements Account in the Public Accounts of Canada. In 2018, the pensions that became payable included immediate annuities (7,641), deferred annuities (3,725), annual allowances payable to former contributors only (1,278) and disability retirement benefits (446). 2019 Annual Report Posted: November 6, 2019. Actuarial shortfalls found between the balance in the RCA accounts and the actuarial liabilities are credited to the RCA accounts in equal instalments over a period of up to 15 years. All cash collateral is reinvested. 2 provides for pension benefits to public service employees declared surplus as a result of the 3‑year Early Retirement Incentive Program that ended on March 31, 1998, which allowed eligible employees to retire with an unreduced pension. These entities are held as investments and do not expose PSPIB to additional risks or returns compared to interests held in non-structured entities. This will be the 5thyear in a row that the full cost of living increase has been provided since the plan converted to a shared risk plan on January 1, 2014. Such agreements contain close-out netting provisions applicable only in the case of default. Other fixed income securities consist of asset-backed term notes (ABTNs) and mortgage-backed securities. The contribution rates for public service employees joining the pension plan on or after January 1, 2013 (Group 2) was set at 8.39% (7.86% in 2017) for the first 9 months and 8.77% (8.39% in 2017) for the last 3 months of pensionable earnings up to the maximum covered by the CPP and QPP; and 9.94% (9.39% in 2017) for the first 9 months and 10.46% (9.94% in 2017) for the last 3 months of pensionable earnings above that maximum. Funded pension benefits relate to post-March 2000 service that falls within the Income Tax Act limits, as an amount equal to contributions less benefit payments and other charges is invested by PSPIB. The minimum fair value of cash collateral required is equal to 102% of the fair value of the securities lent, and in the case of securities collateral 105%. Forwards are contracts involving the sale by one party and the purchase by another party of a predefined amount of an underlying instrument, at a predefined price and at a predefined date in the future. Secretary of the Treasury Board Fixed income consists of cash and money market securities, government and corporate bonds, inflation-linked bonds, private debt securities and other fixed income securities. *You can find your Pension Highlights and Pensioner Annual Statement online by logging in to Your Pension Profile. To reflect the Income Tax Act restrictions on registered pension plan benefits, separate retirement compensation arrangements (RCAs) have been implemented to provide benefits that exceed the limits established in the Income Tax Act. The basic benefit formula is 2% per year of pensionable service multiplied by the average of the 5 consecutive years of highest paid service. Annual Report 2018. The pension plan provides pension benefits based on the number of years of pensionable service up to a maximum of 35 years. The Office of the Chief Actuary (OCA), an independent unit within the Office of the Superintendent of Financial Institutions (OSFI), performs periodic actuarial valuations of the pension plan. Annual Accounts of the ECB . To the extent that IFRS in Part I are inconsistent with Section 4600, Section 4600 takes precedence. Over the past year, we have been making significant progress toward improving and modernizing our systems, tools and practices. All cash receipts and disbursements go to or come from the CRF. Includes spouse or common-law partner, children and students. This amount is presented before collateral held and netting arrangements that do not qualify for offsetting under IFRS. Cash contributions received in fiscal year ended March 31, 2018, totalled $4.8 billion ($4.5 billion in fiscal year ended March 31, 2017), excluding year-end accrual adjustments. Futures are standardized contracts to take or make delivery of an asset (buy or sell) at a predefined price and predefined future date. Benefit security. Such debt securities take the form of senior debt, mezzanine and distressed debt and primary and secondary investments in leveraged loans. These costs include salaries and benefits, systems maintenance and development, accommodation, and other operating costs of administering the pension plan within the department. Excludes deferred annuities that became payable at age 60. In 2017 pspp.ca saw 194,870 visitors on the website. At the end of 2017, we introduced our 2018-2020 Strategic Plan. 2. Quarterly, the fair value is reviewed and adjusted, as appropriate, to reflect the impact of any significant market or investment-specific events or circumstances. Transfers Into PSPP Annual Statements/Pension Highlights Life with PSPP Life with PSPP visit this section. In cases where the conditions for offsetting were met, financial instruments have been presented net in the statement of financial position. For fiscal year ended March 31, 2018, there were 4,765 public service employees (4,896 in the previous year) and 21,385 retired members and dependants (14,214 in the previous year) in this category. PSPP is a program for statistical analysis of sampled data. In general, investments in cash, money market securities, floating rate notes, bonds and public equities are expected to be highly liquid as they will be invested in securities that are actively traded. Private equity investments are comprised of fund investments with similar objectives, co‑investments in private entities as well as direct equity positions. Administrative expenses related to the funded service for 2018 totalled $383 million ($321 million in 2017). Mélanie Cabana, CPA, CA They are described in detail in Note 6 (A). Feedback can be sent to: [email protected] Management report 2 Financial statements of the ECB . The net assets available for benefits mainly consist of the assets managed by the PSPIB on behalf of the pension plan and contributions receivable for past service elections. The funds are also invested in accordance with PSPIB’s Investment Risk Management policy which is outlined in. Valuation techniques are generally applied to investments in private markets, alternative investments, over-the-counter (OTC) derivatives and certain fixed income securities. Certain Crown corporations and public boards are excluded from participating in the supplementary death benefit plan. Figure 3 shows total cash contributions from both the employer and plan members for the last 10 years. The above account transaction statement is unaudited. The total cost ratio decreased from 70.5 cents per $100 of average net investment assets in fiscal year ended March 31, 2017, to 69.8 cents per $100 in fiscal year ended March 31, 2018. PSPP is a program for statistical analysis of sampled data. These achievements continue to ensure the sustainability of the plan. Accordingly, comparative figures were adjusted for consistency. Joint control is established through a contractual arrangement which requires the unanimous consent of the parties sharing control for the activities that significantly affect the returns of the arrangement. 2 is assumed entirely by the government. Pursuant to the legislation, transactions pertaining to both RCA No. PSPIB reviews the fair value received and, where necessary, the impact of restrictions on the sale or redemption of such investments is taken into consideration. Members include employees of departments and agencies in the federal public service, certain Crown corporations and the territorial governments. A summary of these arrangements is provided in Note 23 to the financial statements. Certain fixed income securities are not significantly exposed to interest rate risk as their prescribed rates are variable. The benefits that pension plan members are entitled to when they leave the public service depend on their age and the number of years of pensionable service to their credit (see Tables 3 and 4). Our annual report , details how the money you raised was spent in 2018 and what we did to support people affected by people with PSP & CBD. PSPIB unconditionally and irrevocably guarantees all credit facilities, as well as short-term promissory notes and medium-term notes issued by PSP Capital Inc., as described in Note 11. To date, PSPIB has not received any claims or made any payment for such indemnities. The maximum amount authorized by PSPIB’s Board of Directors for the capital market debt program is 10% of the net investments plus all recourse debt outstanding of PSPIB at the time of commitment to issuance. The IRM Policy outlines a framework that is designed to ensure that investment activities respect PSPIB’s risk philosophy and align with the tolerance and limits of its risk appetite. The terms to maturity of the notional amount of derivatives are disclosed in Note 6(B). As an actuary with more than 20 years of A liquidity report taking into consideration future forecasted cash flows is prepared and presented to PSPIB’s senior management on a weekly basis. In the normal course of business, investments in private markets are commonly held through investment entity subsidiaries formed by PSPIB. The economic assumptions used in the annual actuarial valuation represent management’s best estimate. The allocation methodology of the costs of operation of PSPIB is outlined in Note 10. Read past Annual Reports published by the Ontario Pension ... pensioners and other stakeholders on the progress we've made and our strategies for keeping the PSPP strong for the future. Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or the liability, either directly or indirectly. They reflect PSPIB’s assessment of the assumptions that market participants would use in pricing the assets or liabilities. This policy will help guide decisions to ensure that the plans have sufficient assets to cover the cost of benefits. It is governed by an 11‑member board of directors and reports to the President of the Treasury Board. Such services consist of investment management and financing of private market investments within the context of PSPIB’s capital market debt program described in Note 11(B). *You can find your Pension Highlights and Pensioner Annual Statement online by logging in to Your Pension Profile. The accompanying notes are an integral part of these financial statements. Using quoted market prices that are based on the most representative price within the bid-ask spread, the fair value of securities sold short is measured using the same method as the similar long positions presented within public markets and fixed income. 1 or No. Press Release : Push to Pass Phase 2. Notes 2(F) and 2(G) describe collateral requirements in securities lending and borrowing programs as well as securities repurchase and reverse repurchase agreements. In order to minimize counterparty risk, PSPIB requires that counterparties provide adequate collateral and meet its credit rating requirements. Note 11(B) provides additional information on the usage of the capital market debt program. © Her Majesty the Queen in Right of Canada, represented by the President of the Treasury Board, 2019,ISSN: 2291-4285. Real estate investments focus on partnerships, companies and properties operating mainly in the retirement and residential, office, retail and industrial sectors, as well as private funds invested in real estate assets. The review considered industry practices and emerging changes in accounting standards, and resulted in a revised discount rate methodology. The maximum credit exposure excludes guarantees disclosed in Note 24 as well as investments in funds classified as alternative investments in Note 6 (A). These costs are included in the Secretariat’s operations and maintenance costs charged to the pension plan. Forwards are used to adjust exposures to specified assets without directly purchasing or selling the underlying assets. The following tables present the financial assets and liabilities described above: As described in Note 6 (A)(IX). Cash collateral received is recognized as described in Note 6 (A)(IX). A deferred annual allowance is a deferred annuity that is reduced because of early payment. Participation in the supplementary death benefit is optional for retirees. The government has a statutory obligation to pay benefits relating to the pension plan. OTC instruments consist of those that are bilaterally negotiated and settled, and those that are cleared (OTC-cleared) by a central clearing party (CCP). During the year ended March 31, 2018, floating rate notes were reclassified out of other fixed income securities and into government and corporate bonds in order to better reflect their nature and common characteristics. Retirement compensation arrangements (RCAs) have been established under the authority of the Special Retirement Arrangements Act to provide supplementary pension benefits to certain plan members. 22. Consists of amounts incurred for investments in public markets that are paid directly by PSPIB. In this respect, transactions with such related parties have the same impact on the net assets available for benefits as those with unrelated parties. The costs related to these services are charged to the pension plan. In addition, if there is an amount considered to be a non-permitted surplus (refer to PSSA section 44.4(5) for the definition of non-permitted surplus) related to the pension fund, no further government pension contributions are permitted while pension plan member contributions under the pension fund may be reduced and amounts managed by PSPIB may be transferred to the government’s Consolidated Revenue Fund (CRF). Natural resources investments focus on entities engaged in the management, ownership or operation of assets in timberlands, agriculture and upstream oil and gas. Figure 1 shows the number of active members relative to the number of retired members for the last 10 years. Other fees are paid by certain pooled fund investments classified under alternative investments which amounted to $116 million for the year ended March 31, 2018 ($110 million for the year ended March 31, 2017). Through its pay and pension services, Public Services and Procurement Canada ensures that federal government employees receive their pay and that retired pension plan members receive their pension benefits payments. Liquidity risk corresponds to the risk that PSPIB will not be able to meet its financial obligations on a timely basis, with sufficient and readily available cash resources. There is no predictable direct relationship between this input and any other significant unobservable input. Transactions between PSPIB and its consolidated subsidiaries as well as related balances are eliminated upon consolidation and, therefore, are not disclosed in this note. PSPP Report to Members The PSPP Report to Members is a bi-annual online-only newsletter designed to communicate important information about your Plan. Obligations to repurchase or resell the securities sold or purchased under such agreements are recorded at cost plus accrued interest, which due to their short-term maturity, approximates fair value. Derivative financial instruments are financial contracts that are settled at a future date. In addition, the Secretariat provides strategic direction, program advice and interpretation; develops legislation; liaises with stakeholders; communicates with plan members; and prepares the annual report on the Public Service Pension Plan. An amount equal to contributions net of benefit payments and government departments’ administration expenses is transferred regularly to the PSPIB and is invested in capital markets. Determined based on a weekly basis Board Act capital market debt program Report this document is bi-annual. 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