Our Funding Position as at January 1, 2023
The valuation is a financial check to ensure Plan assets cover Plan liabilities (promised benefits). The January 1, 2023 Valuation results show that the Plan remains in a strong financial position.
Through the process of an annual valuation, the Trustees carefully monitor the funding status of the Plan, to ensure that when looking way into the future, the assets will cover the benefit promised (liabilities) to the members. With the current economic/global uncertainty, the stability and security of benefits as promised remains front and center. The key to benefit sustainability is to remain fully funded; fluctuation in funding levels is primarily driven by investment returns. Therefore, the Trustees have prudently agreed to preserve the current funding level and will review the financial status again in 2024.
Valuation Results - Funding Position as at January 1, 2023
Going Concern - the Plan continues indefinitely, has a funded ratio of 121%
Solvency - if the Plan were to wind-up on January 1, 2023, has a funded ratio of 126%
Current Service Cost - determines the Standard Contribution Rate (SCR) is adequate to pay for future benefits assuming the Plan continues indefinitely. The Standard Contribution Rate will be $5.00 for 2023 and 2024.
Understanding the Standard Contribution Rate (SCR) & Benefit Earned
Your Employer contributes pension contributions for each hour you work based on the Local 8 agreement. The pension contributions received are divided by the Standard Contribution Rate (SCR) to determine your pension earned for the year.
The Standard Contribution Rate for 2023 is $5.00.
For example, if you work under the Provincial Collective Agreement your Employer pays:
· 1 hour @ $4.50 Commercial Rate = 0.90SCR hour @ $5.00 SCR
· 1 hour @ $5.50 Industrial Rate = 1.10SCR hour @ $5.00 SCR
For each SCR hour you earn 4.14 cents of monthly lifetime pension payable at age 60.
If a member works 1,800 hours and their Employer contributed $4.50 per hour, the total pension contributions remitted for the year is $8,100*. The pension contributions are divided by the $5.00 SCR to determine the number of SCR hours.
$8,019* / $5.00 = 1,604 SCR Hours x 4.14 cents = $66.41 monthly pension payable at age 60 for life $33.21 monthly supplementary payable at age 60 to 65.
*less 1% for Funeral Benefit Plan
Using this example, over a 35-year work period, a member at age 60 would receive a pension of $2,324.35 per month for their lifetime, plus an additional $1,162.18 per month of supplementary pension from age 60 to 65. If the member died at age 80, the total pension paid to him/her would be $627,574.80.
The benefit earned is a Joint & Last Survivor, with no reduction on death. This means that on the member’s death at age 80, the $2,324.35 continues to their surviving spouse for their lifetime.
Effective May 4, 2014 under the Sheet Metal and Sheeters & Deckers Provincial Collective Agreements your Employer remits;
Commercial Rate: $4.50 per hour worked
Industrial Rate: $5.50 per hour worked
(example of "earned " hours; if you work 1 double time hour your Employer pays 2 hours of contribution)
If you work for an Employer with an individual Agreement the rate per hour may differ from the two Provincial Collective Agreement Rates.
All Contributions received are converted into Standard Contribution Rate (SCR). Our current SCR rate is $5.00 per hour. For each SCR hour a member earns 4.14 cents towards his/her monthly earned lifetime pension benefit.