Canada asks for extra time to tackle pension problem: The Church of England Newspaper, August 4, 2013 p 6. August 3, 2013Posted by geoconger in Anglican Church of Canada, Church of England Newspaper.
Tags: pensions, Philip Poole
The Anglican Church of Canada has asked clergy for its support in a plea to Ontario pension fund regulators to give it a three year extension of time to address a cash crunch in the church’s pension plan.
In a July 2013 letter to the 1,600 active members and 2,600 retirees covered by the church pension programme the plan administrators told the clergy their approval was needed before the government would grant the plea for more time. “With funding relief, we will have three years to try to improve our plan’s funding level,” they wrote. “At the end of three years, we will do another valuation of the plan. If there is still a solvency funding shortfall, we will likely have no choice but to cut benefits.”
The average age of plan participants is 52.5. “Since the cost of benefits increases as average age increases, the aging of active members continues to be a concern,” the letter said.
In 2012 the church’s pension plan returned an income of 13.2 per cent on assets, and has averaged 7.5 per cent per year returns for the past decade. On a going-concern basis, the plan had a funding rate of 95 per cent with only $28.7 million shortfall at the end of the 2012 fiscal year when total assets were $602.8 million.
However, on a solvency basis, if the plan were to be wound up now, the fund had a gap of more than $169 million between assets and liabilities, leading to a funding rate of only 70.5 per cent.
“I appeal to you to support funding relief by voting yes,” said Bishop Philip Poole, chairman of the pension committee, said in a video address posted on the website of the church’s Pension Office.
“I’m confident our plan members will support this much-needed funding relief. But I have a nagging worry that many members will not complete and return the voting cards that we recently distributed to you by mail,” the bishop said.