Province passes legislation for private sector to become part of Public Service Superannuation Plan
The Nova Scotia Government has passed the Private Sector Pension Plan Transfer Act as part of the Financial Measures (Fall 2023) Act. This legislation, accompanied by amendments to the Public Service Superannuation Act, allows private-sector pension plans to transfer into the Public Service Superannuation Plan (PSSP).
“Broadening the enrolment scope of the PSSP to the private sector is beneficial for the plan as it enhances our potential appeal to a wider range of employers and employee groups. Expanding the PSSP’s membership will improve our aging demographic profile over time and enhance our financial sustainability,” says Leo McKenna, board chair of the Public Service Superannuation Plan Trustee Inc. (PSSPTI).
The legislation represents the next phase in the board's membership growth initiative, which began in 2015, and has so far focused on the university and municipal sectors. Since its inception, the PSSP membership has grown by over 20 new public-sector employers and 3,700 members, with $500 million in assets added to the plan.
“The guiding principles for membership growth are that it must enhance the long-term sustainability of the Plan and be cost neutral to existing members. Those principles will continue to apply for private-sector employers,” McKenna adds.
The Private Sector Pension Plan Transfer Act
The recently passed Private Sector Pension Plan Transfer Act grants all Nova Scotia-based employers the option to offer or continue offering a defined benefit pension plan. For existing plans to qualify for transfer, they must be fully funded, and members of pension plans would have the opportunity to vote on potential mergers.
Finance Minister Allan MacMaster said that broadening the plan's membership could potentially decrease the average age of contributors. As per its most recent annual report, the median age of active members stands at 48. Expanding the group of younger members is also a strategy to guarantee the plan's financial capacity to meet the pension obligations of future retirees.
MacMaster also noted that participating in the fund might attract employers who want to provide an extra benefit to their employees. “For them to be able to offer a defined benefit plan, in a very simple way by joining this plan, that could be a nice feature that they can offer to attract employees and retain employees,” he said, as quoted by CBC.
