The Government of Newfoundland and Labrador and the Newfoundland and Labrador Teachers’ Association have reached an agreement to reform the Teachers’ Pension Plan. The agreement includes a Provincial Government contribution of over $1.8 billion in the form of a promissory note to the plan, over the next 30 years, which will ensure the stability of the plan.
Highlights of the new agreement include:
- The Provincial Government has agreed to take responsibility for all of the existing retiree liability and 50 per cent of the active member liability. Special annual payments of $135 million began on August 31, 2016;
- The Teachers’ Pension Plan active members have taken responsibility for the remaining 50 per cent active member liability through changes to the pension calculation formula, using the average of the best 8 years’ salary instead of the average of the best 5 years for service after September 1, 2015, and the suspension of indexing for future service;
- Future actuarial surpluses and deficits are now shared equally;
- The plan is now jointly sponsored and managed by a Board of Directors as trustee, made up of representatives of the Provincial Government and NLTA;
- To assist in achieving the 100 per cent funded target, members’ contributions increased by 2 per cent, starting September 1, 2015 and are matched by the Provincial Government; and,
- Teachers who terminate after August 31, 2016 with less than 24.5 years’ of service and who choose to take a deferred pension will have to wait until age 62 to access that pension
As a result of TPP Reform, the administration of the TPP has been transitioned to the Teachers’ Pension Plan Corporation, effective November 1, 2017. All inquiries regarding the TPP should be directed to the Teachers’ Pension Plan Corporation.
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