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CAAT pension fund sees funded status rise to 113.3% in 2016

(updated with correction)

Colleges of Applied Arts and Technology Pension Plan, Toronto, on Monday said it was 113.3% funded on a going-concern basis as of Jan. 1, up from 110.4% a year earlier.

The plan’s total assets rose to C$9.3 billion ($6.9 billion) as of Jan. 1, said Derek Dobson, CEO and plan manager. That’s up 8.1% from the start of 2016.

As of Jan. 1, the plan had a funding surplus of C$1.6 billion, compared to a C$1.2 billion surplus in 2015.

CAAT’s discount rate for 2017 is 5.6%, down from 5.7% the previous year.

Mr. Dobson said in an interview the improved funded status in 2016 was broadly the result of higher investment returns, more employer and employee contributions, and about C$100 million in interest gained from the surplus assets.

Mr. Dobson said the plan is exempt from solvency funding rules, which require plans to be funded as if the plan were to be terminated at the start of that year. Going-concern valuations assume the plan will never be terminated.

The plan’s investment returns and contributions for 2016 will be announced in April, and further details on its investments and funding will be included in its annual report to be released in May.