Canada Post Pension Plan 2021 year-end results
A message from Jan Faryaszewski, Chief Financial Officer
We are pleased to inform Plan members that in 2021, the rate of return for the Defined Benefit (DB) component of the Canada Post Registered Pension Plan was 11.3%. This compares to a policy benchmark of 8.6%. Assets in the DB component grew from $29.6 billion to $32.3 billion. The surplus in the DB component grew from $3.8 billion to $4.8 billion on a going-concern basis. This was a funded ratio of 119.3% (which was up from 115.9% in 2020).
The Plan’s solvency deficit to be funded1 decreased from $6.4 billion to $4.9 billion, changing the funded ratio from 82.6% to 85.9%. We are grateful that the Government of Canada approved regulations, to provide Canada Post relief from special solvency payments until the end of 2024. Canada Post acknowledges that it needs to find long-term solutions for the Plan to be sustainable and affordable for Plan members and the Corporation.
Assets in the DC component grew from $100.2 million as at December 31, 2020, to $139.7 million as at December 31, 2021. Canada Post contributed $17.1 million, and members contributed $10.2 million to the DC component in 2021. The average rate of return in 2021 in the DC component of the Plan was 14.6%. We encourage DC members to look at their personalized DC statement mailed to their home or visit mycanadalifeatwork.com to see their personal rate of return.
Check out the 2021 Report to Members under Publications. It provides you with information about the Plan’s performance, investments and services to members, as well as an update on the funded status of the Plan.
Final year-end results for the Plan will be filed with the Office of the Superintendent of Financial Institutions (OSFI) and the Canada Revenue Agency (CRA), our pension regulators, by the end of June.
1The solvency deficit to be funded is measured using a 3 year average. When using market value of Plan assets, the solvency deficit is estimated at $2.5 billion.