No more ad hoc increases for DB pensioners

Saskatchewan introduces guaranteed indexing for retired public servants

The Saskatchewan government is providing guaranteed indexing equal to 70 per cent of the rate of inflation for public sector pensioners' defined benefit plans.

"Providing guaranteed indexing of 70 per cent of the rate of inflation is a fair solution that provides certainty of future pension levels for members of these plans," said Finance Minister Andrew Thomson.

Defined benefit pensioners began receiving ad hoc increases in 1965. Increases have been provided in all but eight years since then. With the guaranteed indexing there will be no more ad hoc increases.

"I listened to the members of these plans and decided on the rate of 70 per cent to balance fairness for the plan members against the demands on the provincial treasury and Saskatchewan taxpayers," Thomson said.

The Superannuation (Supplementary Provisions) Amendment Act 2006 will guarantee the 70 per cent indexing to retirees from the Public Service Superannuation Plan (PSSP), the Power Corporation Superannuation Plan (PCSP), and the Liquor Board Superannuation Plan (LBSP). These are commonly referred to as "the old pension plans."

Approximately 8,000 retirees will receive this benefit. The overall impact to the General Revenue Fund for 2007-08 is estimated to be $11.9 million.

Saskatchewan is providing higher guaranteed indexing at 70 per cent to former workers than either Alberta (60 per cent) or Manitoba (66.67 per cent).

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