'With these new legislative changes, Nova Scotians now have the ability to get a solid retirement in place,' said NS Pension
With the passage of the Private Sector Pension Plan Transfer Act (PISPA) now in effect, the Public Service Superannuation Plan the (PSSP) has opened its doors to private sector employers, an ambitious step given the decline of defined benefit plans in the corporate world.
“DB plans have been on the decline for decades now,” asserted Doug Moodie, CEO of Nova Scotia Pension. “There are very few private sector employers who continue to have DB plans because they're expensive, they're complicated to run, and you have overarching liability for them.”
But he sees an opportunity to reverse that trend in Nova Scotia. PSSP's expansion means private employers can now offer their workers a secure retirement without taking on the burden of managing a defined benefit plan themselves.
“The beauty of offering the PSSP DB plan to private sector employers and their employees is that the employees get an accrued benefit, and no matter what happens to the employer, they still have that benefit,” he explained.
“The employers have no overarching responsibility for the plan. They just pay their contributions.”
For over a century, since 1923, the PSSP has served as a financial cornerstone for Nova Scotia’s public sector employees. Now, with new legislative changes and participation options, its administrators are working to bring those same benefits to more workers across the province, including those in the private sector.
Historically, the PSSP was exclusive to provincial employees. Over the years, that has changed as participation has steadily expanded to include universities and municipalities through legislative moves like the University Pension Plan Transfer Act and the Municipality and Other Authority Pension Plan Transfer Act.
Moodie believes that the PSSP stands apart from the unpredictable nature of individual savings plans, adding that the long-term goal is to eliminate what he calls “pension envy” by making defined benefit plans more widely available.
“Defined benefit pension plans do give you an assurance as to what you're going to be receiving when you ultimately retire, and not only what you're going to be receiving as the member who accrued the entitlement, but it flows through to spouse and dependents and beneficiaries,” he said.
“We could potentially bring everybody in the province into the PSSP one day… there’d be nothing to envy anymore,” he added.
Unlike defined contribution plans or personal RRSPs, which are heavily dependent on market performance and individual savings discipline, the PSSP provides guaranteed lifetime income.
Brendon LeLievre, Nova Scotia Pension’s new senior manager of business development has been tasked with educating Nova Scotians on the benefits of joining the PSSP.
“My goal is to let them know that the PSSP is available and accessible to them and to get as many Nova Scotians as possible on a solid, foundational retirement plan with the PSSP,” he said. “People need to know we’re out there, and that with these new legislative changes, they now have the ability to get a solid retirement in place.”
A ‘true DB plan’
Even with broader eligibility, a traditional defined benefit pension plan can be a heavy financial commitment for employers and workers. That’s why Nova Scotia Pension introduced PSSP Vantage, which offers new participation tiers at 80 per cent and 60 per cent of Nova Scotia Pension’s full plan.
Moodie explained the standard PSSP contribution rates, which currently sit around 8.4 per cent on earnings below the Year’s Maximum Pensionable Earnings (YMPE) and 10.9 per cent on earnings above it, can be a significant payroll deduction.
The new lower-tier options provide flexibility, allowing businesses to participate at levels that suit their budgets. The move makes the PSSP accessible to industries where employer-sponsored pensions are rare while also supporting long-term sustainability by increasing membership participation.
“The potential is pretty much limitless in terms of growing the PSSP,” said Moodie. “A bigger PSSP is a healthier PSSP.”
LeLievre also sees the expansion as a major win for workforce retention.
“It's no longer about what dollar amounts they have in their accounts. It's more about how many years of service they have until retirement,” he said. “They can truly plan and stick with it if they're with a company that is providing them a pension.”
Despite these efforts, the broader retirement landscape in Nova Scotia remains uncertain as LeLievre acknowledged it’s difficult to get a precise read on how well-prepared Nova Scotians are for retirement.
“Most people, other than public sector workers, are either trying to save individually or through a group plan with their employer,” he says. “Those contribution rates can vary from 2 per cent to 10 per cent, and they’re really heavily reliant on the market.”
Contrastingly, the PSSP guarantees predictable retirement income regardless of market volatility. And Moodie argued that the shift away from defined benefit plans has left many workers vulnerable.
“If you've converted your DB plans to DC plans, you can now have the option of moving your folks into the PSSP, which is a true DB plan,” he said. “You can give your employees all the benefits that accrue from DB plans without the employer taking on the responsibilities.”
