Pension Dog of the Day

August 2, 2011
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In 1979 the Saskatchewan Teachers’ Superannuation Plan (STSP), created in 1930, was estimated to be short $1.29 billion. The government wanted to get out from under the liability of defined benefit pensions at the time and mandated that all new employees with the province would be enrolled in DC pension plans.

In 1990 teachers in Saskatchewan decided to create a new DB pension that would be the responsibility of the Saskatchewan Teachers Federation. They created the Saskatchewan Teachers’ Retirement Plan. All new teachers were enrolled in the new plan. This is a new DB pension underwritten by the Saskatchewan Teachers Federation (STF). We will see what sort of pressure is put on taxpayers to ante up in future years.

This left the old STSP plan stranded with retired teachers and active teachers who were in the plan before 1980. The shortfall in the plan has blossomed to over $4 billion from the original shortfall in 1979. Currently the plan has $900 million in it, pays out $ 300 million a year and will run out in about 3 years. At that time it will be come a pay-as-you go plan which will be the responsibility of the taxpayers of Saskatchewan.

This shows the long term result of pensions and who will be ultimately responsible for them, taxpayers. When the plan was closed to new members in 1979 it was estimated to have a shortfall of $1.29 billion. Today it has a $ 4 billion shortfall.

STSP facts:

  • June 30, 2010, the unfunded liability in the Teachers’ Superannuation Plan is estimated to be $4.006 billion
  • There are 1,499 teachers who are active members of this pension plan
  • There are approximately 11,280 people receiving pension benefits
  • Youngest member of the Plan was born on December 23, 1959
  • The Plan’s oldest superannuate was born on December 9, 1903
  • Active teachers contributed $8,1 million into the plan
  • The plan paid out $309 million to retirees
  • The plan has $999 million in assets
  • It owes $5.142 in future benefits
  • It has a shortfall of $4.005 billion
  • With a total of 12,799 members it owes each member a total of $391,000

http://www.stf.sk.ca/benefits/pdf/strp/strp_overview.pdf

http://www.stsc.gov.sk.ca/publications/2009-10%20TSC%20Annual%20Report.pdf

Bill Tufts

Fair Pensions For All

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