Funding Policy Announced for the CAAT Pension Plan
On September 27, 2006, the Sponsors' Committee of the CAAT Pension Plan approved a Funding Policy that will help to address the current deficit situation and should increase the stability of the Plan's funding in the future.
The Policy, recommended to the Sponsors' Committee by the Board of Trustees and its Funding Task Force, contains 10 points that will reduce the current deficit and provide a framework for dealing with future surpluses and deficits.
Impact on Members
Point 1 of the Policy increases contribution rates by 1% on each of January 1, 2008, 2009 and 2010, for a total increase of 3%. This will apply equally to both Plan Member and College contributions.
Point 2 of the Policy states that the Plan will not be guaranteeing indexation increases annually, starting with the granting of indexation for service earned after December 31, 2007. Indexation for service earned after that date may be granted each year on an ad hoc basis - if it is affordable, meaning that the Plan is 100% funded according to the previous year's actuarial valuation.
Impact on Pensioners
It's important to keep in mind that pensions currently in payment, or those that start before January 1, 2008, will not be affected either by this change in the granting of indexation payments or by the change in contribution rates.
October 2006
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