Pensions in the Public Sector
Jointly Trusteed Public Sector Pension Plans
Public sector pension plans in B.C. represent about 580,000 members and invest more than $113 billion in assets on behalf of their beneficiaries:
Government manages its risks and interests in these plans through its role as Partner in each of these plans, under the authority of the Minister Responsible for the Public Sector Pension Plans Act.
Joint Trust Agreements established boards of trustees, which are comprised of people appointed by the Partners in the plans, including the Government Partner. The Partner’s role in this is governance, while the boards’ role is administration. The boards are responsible for the administration of the plans and the investment of the plans’ funds. Their primary service providers, the BC Pension Corporation and the BC Investment Management Corporation, assist the boards in their administrative responsibilities. The B.C. Minister of Finance, as the Pension Plan Partner to these plans, and the Minister’s Representative in the PSEC Secretariat, are guided by the B.C. government Pension Plan Partner Governance Framework (PDF).
Canada Pension Plan
The Canada Pension Plan (CPP) is a cornerstone of the Canadian retirement income system. This calls for robust governance and prudent stewardship of the CPP to ensure that:
- sufficient assets are accumulated to meet the cost of legislated CPP benefits
- contribution rates remain stable, and
- Canadians can expect predictable benefits from the CPP
The Ministers of Finance of the Federal and Provincial Governments are the Stewards of the CPP, supported by their Representatives who carry out the day-to-day responsibilities of CPP stewardship. The CPP is administered by Employment and Skills Development Canada and the Canada Revenue Agency under the Federal Government, which collect and record contributions and pays benefits to Canadians. The CPP Investment Board (CPPIB) invests the CPP contributions in a broad mix of global and domestic asset classes with the objective of maximizing returns without undue risk of loss.
The Stewards’ Representatives sit on various committees of officials, including the CPPIB Nominating Committee. The B.C. Minister of Finance, as the B.C. CPP Steward, and the Minister’s Representative in the PSEC Secretariat, are guided by the BC Steward Canada Pension Plan – Canada Pension Plan and Canada Pension Plan Investment Board Stewardship Framework (PDF).
Taking its direction from the Minister of Finance, the Public Sector Employers’ Council Secretariat (PSEC Secretariat) represents the Minister of Finance as Government Pension Plan Partner and B.C. CPP Steward. The Secretariat provides:
- The Representative role for the four jointly trusteed public sector pension plans and the CPP
- Responsibility for the daily oversight of the jointly trusteed public sector pension plans and the CPP
- Strategic pension advice and recommendations to the Government Pension Plan Partner and B.C. CPP Steward
- The critical link between the Government Pension Plan Partner’s fiscal and policy direction and the Boards of Trustees, other plan partners, employers and their associations, and other organizations
- Liaison with other jurisdictions
- Participation in the CPP Committee of Officials, other related committees, and the CPP Investment Board (CPPIB) Nominating Committee, the latter which is responsible for overseeing director searches and succession planning for the CPPIB Board of Directors
The combined responsibilities for the jointly trusteed public sector pension plans and the CPP allows for a more robust and strategic retirement income system perspective. PSEC Secretariat’s public sector guidance responsibilities (bargaining mandate and compensation policies) also allows for greater oversight for total compensation purposes.