AC pension plan in a surplus position
Air Canada has provided an update regarding its Canadian pension plans solvency status and based on preliminary estimates projects its Canadian registered pension plans at Jan. 1 to be in a small surplus position.
The Canadian registered pension plans solvency deficit at Jan. 1, 2013 was $3.7 billion. Final valuations as of Jan. 1, 2014 will be completed in the first half of 2014.
The elimination of the previous $3.7 billion deficit is the result of several factors: (1) a 13.8% return on investments during 2013, (2) the implementation of previously disclosed pension benefit amendments which are estimated to have decreased the solvency deficit by approximately $970 million, (3) contributions made by the corporation for the year of $225 million in respect of the solvency deficit and (4) the application of an estimated prescribed discount rate of 3.9% to calculate its future pension obligations.
“Air Canada’s three primary pension objectives are to ensure our employees’ and retirees’ pensions are secure, the pension solvency deficit is eliminated and that the costs associated with maintaining the pension plans remain affordable, predictable and stable,” said Calin Rovinescu (pictured), president and chief executive officer. “We have, over the past four years, made significant progress on all these objectives.”
