COVID-19: How we’re keeping you and your pension safe
With the evolving COVID-19 pandemic in Ontario, we know you may be feeling anxious about keeping your loved ones safe and healthy. In our previous updates, we shared that we have transitioned to working from home to help keep our clients, employees and community safe (Read more here).
Your pension is secure
We also know that the market volatility has been adding to many people’s anxiety. We wanted to provide an update to reassure our members and retired members that your pension is secure. Retired members will continue to receive pension payments as scheduled.
Your pension is based on a pre-set formula, not short-term market returns
As a member of a defined benefit plan, like the PSPP, the good news is that you don’t need to worry about the impact of the current market volatility on the pension you’ve earned. Your pension is based on a pre-set formula and will provide you with a reliable stream of income for your lifetime. It’s not based on how much you contribute or what the markets are doing when you retire. It is also backed by the Ontario government.
The Plan has successfully navigated challenging markets before
In terms of how the current market conditions are affecting the Plan as a whole, it’s important to remember that defined benefit plans like the PSPP are designed for the long term. This means that the Plan’s sustainability is not dependent on how the markets perform in any given year. Challenging markets are part of investing; what’s important is how the Plan performs over the long term. The PSPP has been paying pensions for 100 years and has a very strong long-term rate of return. We have successfully navigated through a number of challenging market periods in the past, like the 2008 global recession. We are actively managing through the current market volatility and remain focused on implementing our long-term investment strategy that is designed to protect the pension promise.