Actuarial Report (19th) on the Pension Plan for the Public Service of Canada as at 31 March 2020 - Highlights

Office of the Superintendent of Financial Institutions
Office of the Chief Actuary

Main Findings

Financial Position
($ millions)
AccountFootnote 1Fund
Recorded Balance/Actuarial Value of Assets91,537125,409
Surplus (ShortfallFootnote 2)(7,300)14,500
Funding Ratio92.6%113.1%
Member Contribution Rates
Calendar Year 2022
Group 1Group 2
Below YMPEFootnote *9.36%7.95%
Above YMPE12.48%11.82%

Message from the Chief Actuary

  • The current service cost is shared equally between the employees and the employer. The current service cost is expected to decrease due to the increasing weight of Group 2 members.
  • Contributions are expected to exceed Fund expenditures until 2031.
  • We reflected the impacts of the COVID-19 pandemic on the economic assumptions used in this report. The pandemic is a very fluid situation that will continue to evolve for some time. The final impacts will be reflected in future reports

Key Assumptions

Discount RateCurrentPrevious
Ultimate real rate on the Account2.1%2.7%
Equivalent flat real rate on the Fund3.6%3.7%
Life expectancy at age 65 (in years)20202036

Current Service Cost
(% of pensionable payroll, by calendar year)

Graphic description - Current Service Cost
Calendar YearGroup 1Group 2Total
Summary of Membership Data
NumberAverage Age
Surviving Spouses47,67779.6
Surviving Children1,15913.3
Total Membership638,779

Account and Fund Projection

Graphic description - Account and Fund Projection
As of 31 MarchAccount LiabilitiesFund LiabilitiesFund Assets

Evolution of Cash Flows over Time

Graphic description - Evolution of Cash Flows over Time

Bar graph showing the evolution of cash flows under the Pension Fund over time. Y-axis represents the expected contributions, payments and resulting net cash flows in millions. X-axis represents the plan year, starting in 2021 and ending in 2039.

In plan year 2021, contributions to the Pension Fund are $5,018 million, whereas payments are $3,493 million, resulting in net cash flows of $1,525 million. Both contributions and payments are increasing over time, however payments are increasing at a higher rate than the contributions. Payments will be higher than contributions starting plan year 2031.

In 2031, the chart shows payments of $7,279 million exceeding contributions of $7,145 million and resulting in net cash flows of negative $134 million. From 2031, the Pension Fund experiences negative net cash flows. In plan year 2039, contributions to the Pension Fund reach $9,292 million, whereas payouts reach $13,252 million resulting in net cash flows of negative $3,960 million.


Footnote 1

The Account tracks the liability for service prior to 1 April 2000.

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Footnote 2

It is expected that a special credit of $7,805 million in 2022 will eliminate the Account shortfall including accrued interest.

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Footnote *

The actual 2021 YMPE is $61,600. It is projected to increase to $65,300 in 2022.

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