But that doesn’t mean that we can relax, especially given our current deficit, discount rate (currently 6.0% nominal), and the extremely long-term commitments provided by DB pension plans. Our continuing challenge is to ensure that the Plan remains viable – and valued by its many constituents – over the next 20, 50, and even 100 years.
As we gaze into the distant future, a number of fundamental questions arise: What benefits will members want? How much will members and employers be willing to pay for those benefits? And how do we ensure that an effective cost-benefit balance is maintained from one generation to the next?
With these questions firmly in mind, the primary objective of the Comprehensive Plan Review is to ensure that the Plan remains “sustainable” over the very long-term – as confirmed by the following definition adopted by the Board in December 2017:
Granted, any reasonable plan design will remain sustainable if members and employers agree to fund the benefit promise, regardless of the cost of current and future benefits. Using the definition of sustainability outlined above, the intent is to:
- identify “an appropriate range of benefits” and “an acceptable range of costs;”
- ensure that appropriate benefit and contribution levels are maintained through both favourable and unfavourable circumstances; and
- confirm that the Plan continues to provide a strong value proposition for both employers and members for generations to come.
It’s not necessarily about providing the same benefits across generations. It’s about providing stable, secure, and relevant benefits that don’t favour one generation at the expense of another.