Teachers and their employers will have to dig a little deeper next year to shore up the educators’ pension plan.
Longer life expectancies and tough economic conditions were among the factors cited by the B.C. Teachers’ Pension Plan for its decision to increase contribution rates, according to a letter received by the Okanagan Skaha School District board at its meeting last week.
The 1.3 per cent hike for both members and employers will cost the district an extra $50,000 a year, effective July 2013, according to secretary-treasurer Ron Shongrunden.
The letter says the pension plan is currently 96 per cent funded, down from 98 per cent in 2008. It says the plan’s position was hurt by lower than forecasted investment returns, a three per cent decline in active members, and a 1.5-year increase in members’ life expectancies over the past 12 years.
According to the pension plan’s 2011 annual report, it realized a 3.1 per cent return on investments in 2011 that saw the market value of its assets grow by $300 million to $16.9 billion.
The plan received $687 million in contributions in 2011, 54 per cent of which came from employers and 45 per cent of which came from members, according to the report. The balance came from other plans.