REPORT OF THE

SUPERINTENDENT OF PENSIONS

ON THE ADMINISTRATION OF THE

PENSION BENEFITS ACT

FOR THE YEAR ENDING

MARCH 31, 2013

______________________________________________________________________ February 24, 2014 The Honourable Kelly Regan Minister of Labour and Advanced Education P.O. Box 697 Halifax, NS B3J 2T8 Dear Minister: Pursuant to the requirements of Section 94 of the Pension Benefits Act, I have the honour to submit herewith the Annual Report of the Pension Regulation Division for the fiscal year ended March 31, 2013. Respectfully submitted,

________________________ Nancy MacNeill Smith Superintendent of Pensions

Pension Regulation Division PO Box 2531 Halifax, Nova Scotia B3J 3N5

Page 1

THIRTY-SIXTH ANNUAL REPORT ON THE

ADMINISTRATION OF THE PENSION BENEFITS ACT FOR THE PERIOD ENDED MARCH 31, 2013

INTRODUCTION In accordance with Section 94 of the Pension Benefits Act (RSNS, 1989, c. 340), the Superintendent of Pensions is required to report annually to the Minister. This Report covers the affairs and transactions of the fiscal year 2012 – 2013. The Pension Benefits Act governs employer-sponsored pension plans established in respect of Nova Scotia employees. It does not apply to employees engaged in work that is subject to federal jurisdiction, nor does it apply to the pension plans established for provincial public servants, teachers, judges, members of the legislature, or Sydney Steel Corporation. The main objective of the Pension Benefits Act is to oversee administration of the benefits promised to members under pension plans. This is accomplished through the establishment of minimum funding standards and minimum benefit standards in respect of eligibility requirements, vesting and locking-in, employer contributions, transfer rights, spousal benefits, prohibitions against sex discrimination and disclosure of information. The Superintendent of Pensions, Pension Regulation Division, is responsible for the administration of the Pension Benefits Act. PENSION BENEFITS STANDARDS LEGISLATION In addition to Nova Scotia, pension benefits standards legislation has been enacted by the federal government and all other provincial governments except for Prince Edward Island. The representatives of those authorities that have pension legislation meet on a continuing basis to discuss changes in the pension field and means of dealing with problem areas. Representatives of the various authorities are members of the Canadian Association of Pension Supervisory Authorities (CAPSA). CAPSA’s mission is to facilitate an efficient and effective pension regulatory system in Canada. During the year under review, CAPSA met in Charlottetown in September 2012. CAPSA members also participated in two conference call meetings held in June 2012 and January 2013. Various sub-committees of CAPSA met during the year. A summary of CAPSA’s activities is as follows:

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The Agreement Respecting Multi-Jurisdictional Pension Plans (the Agreement), developed by CAPSA, has been signed by Ontario and Quebec and came into effect for these jurisdictions on July 1, 2011. It is expected that more jurisdictions will be able to enter into the Agreement in 2014/15.

CAPSA members approved a new 2012-15 Strategic Plan. The plan outlines the

strategic priorities and initiatives of the organization over the next three years. The strategic priorities and initiatives are to:

o Enhance engagement with policy makers and stakeholders, and support inter-jurisdictional coordination and harmonization.

Develop options to address the current risks to the defined benefit pension plan sector which can be used by CAPSA members to engage the policy makers in their jurisdictions.

Develop and build relationships with policy organizations such as institutes and research organizations.

Participate in the Joint Forum to address inter-jurisdictional and cross-sectoral pensions, insurance and securities issues across Canada.

Examine enhanced cooperation with membership in the international Organization of Pension Supervisors.

o Support the adoption and continued implementation of the Agreement Respecting Multi-Jurisdictional Pension Plans.

Facilitate the signing of the Agreement by all jurisdictions and its implementation.

Monitor legislative changes that are introduced across Canada and consider their implications, and make changes to the Agreement as appropriate.

o Promote consistency in the regulatory response/frameworks to funding issues and issues arising from new types of pension plans and innovations.

Promote consistent standards for ranges of acceptable actuarial assumptions and methodologies and standards for use of margins in actuarial valuations.

Promote a common regulatory approach and consistent standards for the treatment of new regimes and pension plan designs, including: Pooled Registered Pension Plans, Multi-Employer Pension Plans, Jointly-Sponsored Pension Plans, Target Benefit Pension Plans and other hybrid pension plans.

Complete the work on defined contribution (DC) pension plans, including finalizing the DC Plans Guideline.

Review and determine if revisions are necessary to CAPSA Guideline No. 4 - Pension Plan Governance Guidelines and Self-Assessment Questionnaire.

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CAPSA met with Finance Canada to discuss the Pooled Registered Pension Plans Act (PRPPA) which was enacted by the federal government effective on December 14, 2012. CAPSA members reiterated the importance of resolving certain regulatory implementation concerns. CAPSA’s PRPP committee will work to develop a coordinated approach among CAPSA members to address the outstanding regulatory issues.

The Defined Contribution Plan Committee of CAPSA released a draft guideline for public consultation on current and alternative approaches to regulating and supervising defined contribution pension plans in July 2012.

The Joint Forum of Financial Market Regulators addresses inter-jurisdictional and cross-sectoral pensions, insurance and securities issues across Canada. CAPSA members are represented on the Joint Forum. The Joint Forum held a conference call meeting in June 2012 and met in Charlottetown in September 2012. AGREEMENTS WITH OTHER AUTHORITIES Agreements with the Government of Canada, and other provinces having pension legislation, provide for the reciprocal registration, audit and inspection of pension plans. Under these agreements, a pension plan subject to the legislation of more than one authority is supervised by the jurisdiction which has the greatest number of plan members. The regulatory body in the jurisdiction of registration applies the rules of other jurisdictions, where applicable. A new reciprocal agreement to replace the original agreement which has been in place since 1968 has been finalized. Ontario and Quebec implemented the Agreement effective July 1, 2011. It is expected that more jurisdictions will enter into the Agreement in 2014/15. MEMORANDUM OF UNDERSTANDING Statistics Canada and the Province have a Memorandum of Understanding respecting the information about employer pension plans under the custody and control of the Superintendent of Pensions. Under that Memorandum, information compiled by the Superintendent is submitted to Statistics Canada for the development of integrated social statistics for Canada. The Province also has a Memorandum of Understanding with the Canada Revenue Agency (CRA) to harmonize the exchange of data and information respecting employer pension plans under the control of the Superintendent. Data from a joint Annual Information Return on pension plans is collected by the Superintendent and shared with CRA.

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LEGISLATIVE / REGULATORY REVIEW May 17, 2012 - The NewPage Port Hawkesbury Pension Plans Act received royal assent. The Act gives the administrator of the four NewPage Port Hawkesbury pension plans permission to extend the wind up of the plans to July 1, 2023. June 26, 2012 – Order in Council 2012-214 established the regulations under the NewPage Port Hawkesbury Pension Plans Act. Under these regulations, members, including retired members, could elect to participate in either an extended wind up or an immediate wind up of their plan. August 7, 2012 - Order in Council 2012-257 exempted Pacific West Commercial Corporation from the requirement to be a successor employer under Section 85 of the Pension Benefits Act in respect of the four NewPage Port Hawkesbury Corp. pension plans. December 21, 2012 – Order in Council 2012-396 exempted university defined benefit pension plans from the requirement to fund solvency deficiencies. December 21, 2012 - Order in Council 2012-397 exempted municipality and school board defined benefit plans and the Atlantic Police Association Pension Plan from the requirement to fund solvency deficiencies. December 21, 2012 - Order in Council 2012-398 exempted DirectioNS Council for Vocational Services Society from the requirement to make solvency deficiency payments until January 1, 2018. It exempted specified multi-employer pension plans from the requirement to fund for solvency. As well, pension plan members are now permitted to transfer the value of their pension benefits to a pension plan registered in another jurisdiction. February 1, 2013 – Order in Council 2013-31 established the effective date of wind up of the four NewPage Port Hawkesbury pension plans. February 11, 2013 – Order in Council 2013-37 provided that all pension plans can fund solvency deficiencies arising before January 2, 2014 over a period of 15 years, if no more than 1/3 of members and retirees object to the extension to solvency funding. March 28, 2013 - Order in Council 2013-144 increased fees by 5.8% effective April 1, 2013.

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OPERATION OF THE DIVISION In 2013 the Division implemented a pension administration database developed by Alberta. The system replaces an existing database that had been developed prior to 2000. As at March 31, 2013, the Division was responsible for the supervision of 506 pension plans. Twenty applications for registration were processed during the fiscal year. Five of the filed plans were in the process of being wound up.

SUMMARY OF PENSION PLANS APPROVED, TRANSFERRED, OR TERMINATED TO MARCH 31, 2012

Active Plans On File as at March 31, 2012

501

New Plans Filed

20

Plans Terminated

-15

Plans Transferred To Other Jurisdictions

0

Active Plans On File as at March 31, 2013 506

Deduct: Plans In Process of Registration

-22

Registered Plans

484

SUMMARY OF PERMITS/APPROVALS OF DOCUMENTS RECEIVED TO MARCH 31, 2013

Registration of Amendment to Plan 78 New Pension Plan Registrations 13 LIF Registrations 22 Approvals only (Policy, Trust Agreements, other documents not requiring registration) 12

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The following table shows that during the period under review, 15 pension plans were terminated covering 267 employees. One hundred and one (101) of these employees were members of plans that merged with another plan. Seventy four (74) of these employees were in plans that were replaced by a group RRSP or an individual annuity.

TERMINATED PENSION PLANS

Reason for Termination

# of

Plans

# of Active Members

No members left 2 0 No reason given 3 3 Merged with another plan 2 101 Replaced with group RRSP/annuity 2 74 Company dissolved or sold 5 81

Financial problems 1 8 TOTAL 15 267

There were also six partial plan terminations affecting 430 members. Of these, 4 were plan mergers where 410 plan members continued membership in another pension plan. CONTRIBUTIONS In accordance with Section 27(1) of the Pension Benefits Act, the administrator of a pension plan registered in Nova Scotia is required to file an Annual Information Return (AIR) outlining the contributions made to the pension plan and changes in plan membership. The AIR must be filed within 6 months following the plan year end. Contributions and membership data from filed Annual Information Returns are compiled and forwarded to Statistics Canada for inclusion in its Annual Report on pension plans in Canada. Information from the Return is also forwarded to Canada Revenue Agency. Based on the Returns filed with the Division as of February 3rd, 2014, total contributions for 2012 were $883.62 million, up from $703.28 million in 2011.This represents a 25.6% increase in contributions.

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The employee and employer contributions to pension plans under supervision for the year ending December 31, 2012, were as follows: 2012 CONTRIBUTIONS

Employee Required Contributions $238,822,283

Employee Voluntary Contributions $13,713,177

TOTAL EMPLOYEE CONTRIBUTIONS $252,535,460

Actual Employer Current Service Contributions $350,710,430

Employer Contributions made from Surplus $502,074

TOTAL EMPLOYER CURRENT SERVICE CONTRIBUTIONS $351,212,504

Employer Special Payments $279,872,799

TOTAL EMPLOYER CONTRIBUTIONS $631,085,303

TOTAL CONTRIBUTIONS $883,620,763

In 2012, employees contributed 28.6% of total contributions and employers contributed 71.4% of total contributions. Employer contributions made from surplus were $502,074, up from $451,261 reported for 2011. Employer special payments were $279.9 million, up from $133.7 reported for 2011. An analysis of the special payments made by employers, and the use of surplus to fund benefits, is as follows:

58.383

83.948 70.89

56.246 42.208

58.795

90.431

133.8 133.756

279.87

0

50

100

150

200

250

300

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Mill

ion

s

Funding Analysis

Special Payments Surplus Use

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SECURITY OF RETIREMENT INCOME The measure used to determine the security of retirement income for members of private and municipal government pension plans is that of the solvency of the plan. Defined contribution pension plans are solvent by the very nature of the plans. However, the risk to defined contribution plans is that of non-remittance of contributions to the pension fund. Accordingly, the division followed up on 81 notices of non-remittance issued by the fund holder in the fiscal year, within an average of 10 business days, to ensure the overdue funds were remitted. The solvency of defined benefit plans is measured through solvency valuations performed by an actuary. If defined benefit plans are not fully solvent, there must be a strategy in place to achieve full solvency funding within 5 years. Note that under the Income Tax Act (Canada), individual pension plans for shareholders are not permitted to fund solvency deficiencies. Numerous measures for providing relief for solvency funding have been provided over the last 11 years. The 2008 recession and continuing low interest rates provided an extremely challenging landscape for the solvency funding of defined benefit plans.

Multi-employer pension plans: o 2002 - exempted from the requirement under Section 79 of the Act to

provide ”grow-in” benefits on plan wind up. Grow-in benefits are the right to receive subsidized early retirement benefits, provided under some plans, when a plan is wound up, even though the members have not met eligibility requirements for receipt of these benefits;

o 2007 – specified multi-employer pension plans (building trades) could elect once to be exempted from solvency funding for 3 years, with a requirement to fund an unfunded liability over 10 years instead of 15 years, all in respect of deficiencies identified in a report prepared as at a date before November 1, 2010;

o 2010 – specified multi-employer pension plans could elect once to be exempted from solvency funding for 3 years, with a requirement to fund an unfunded liability over 10 years instead of 15 years, all in respect of deficiencies identified in a report prepared as at a date before January 2, 2011;

o 2012 - full exemption from the requirement to fund solvency deficiencies was given to specified multi-employer pension plans.

Universities: o 2006 – given 15 years to fund a solvency deficiency that arose before

January 1, 2006; o 2010 – payments for solvency deficiencies in a university pension plan

arising before January 2, 2011 could be omitted in the first year of the

Page 9

three-year period beginning with the first valuation report prepared between December 30, 2008 and January 2, 2011.

o 2011 - given an additional two years of solvency funding exemption. o 2012 - fully exempted from the requirement to fund solvency deficiencies.

Municipalities: o 2006 – until 2016, only required to fund to 85% solvency over a 5-year

period; o 2010 – Any deficiency greater than 15% of total solvency liabilities could

be amortized over 10 years instead of 5 years; o 2012 - fully exempted from the requirement to fund solvency deficiencies.

School Boards: o 2012 – fully exempted from the requirement to fund solvency deficiencies.

The Atlantic Police Association Pension Plan: o 2012– fully exempted from the requirement to fund solvency deficiencies.

The DirectioNS Council for Community Living Pension Plan: o 2012 – exempted from solvency funding for 5 years.

All plans: o 2004 - no longer required to include “grow-in” benefits in the determination

of solvency liabilities, but the benefits must still be provided on plan wind up;

o 2009 - solvency deficiencies identified in a report prepared between December 30, 2008 and January 2, 2011 could be amortized over 10 years instead of 5 years if fewer than 1/3 of the active, deferred and retired members objected;

o 2013 - solvency deficiencies arising before January 2, 2014 can be amortized over a period of 15 years, if no more than 1/3 of active, deferred and retired members object to the extension to solvency funding.

These regulatory changes combined with economic conditions will result in a delay in improvement of the solvency position of these plans. As at March 31, 2013, 5 specified multi-employer pension plans, 16 municipality pension plans, 6 university pension plans, 5 school boards pension plans, and 1 police association pension plan were permanently exempted from solvency funding. Solvency funding exemption has been provided for 1 plan until 2017. There were 21 private plans that had elected to take advantage of the solvency funding relief provided. The following table shows the change in the percentage of defined benefit pension plan members in fully solvent plans from 2003 to 2012.

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The dramatic change for 2013 is a result of one very large plan representing 38% of defined benefit plan members in 2012 that was 100% solvent in 2012 and is now reporting a solvency ratio of 97%. The following is a breakdown of membership in defined benefit pension plans in 2013 by solvency of the plans: • 1.7% of members are in plans that are 100% solvent, • 54.8% are in plans that are between 90% and 99% solvent, • 22.5% are in plans that are between 80% and 89% solvent, • 20.4% are in plans that are between 70% and 79% solvent, and • 0.6% are in plans that are less than 70% solvent. In total, 79% of members are in pension plans that are 80% solvent or better.

0

20

40

60

80

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

69

49

56 53 53

63 61

51

43 40

1.7

Pe

rce

nt

of

Me

mb

ers

Percent of Members in Fully Solvent Defined Benefit Plans

Page 11

Note: The size of the bubble is reflective of the number of members in pension plans at a particular solvency funding level. The solvency of pension plans registered in Nova Scotia, as shown on the chart on the following page, shows the funded status of pension plans in accordance with the category of solvency funding that applies. Specifics on those plans are as follows: Weighted Number Number of Solvency

of Plans Members Ratio SMEPPs (specified multi-employer

pension plans) 5 3,802 .81 Municipalities and Police Association 17 11,154 .76 School Boards 5 2,572 .79 Universities 6 5,120 .79 Others (extension) 20 5,755 .81 No extension or relief 41 63,835 .94 Individual Pension Plans (Shareholders) 66 83 .93 Total 160 92,321

0.5

0.6

0.7

0.8

0.9

1

1.1

1.2

1.3

1.4

1.5

Pla

n S

olv

en

cy

Solvency of Pension Plans

Page 12

Note: The size of the bubble is reflective of the number of members in pension plans at a particular solvency funding level.

0.55

0.65

0.75

0.85

0.95

1.05

1.15

July-09 January-10 August-10 February-11 September-11 April-12 October-12

SMEPPs

Municipal

Universities

School Boards

Others

No Extension

IPPS

Valuation Period

Pla

n S

olv

en

cy

Page 13

FINANCIAL HARDSHIP UNLOCKING Effective July 1, 2007, the Pension Benefits Act permits unlocking of pension benefits transferred to a Locked-in Retirement Arrangement or a Life Income Fund for reasons of financial hardship. The unlocking criteria are for:

i. mortgage arrears where the owner is facing foreclosure; ii. medical expenses not paid under another program; and iii. income below $20,440 (for 2013).

The following statistics relate to the unlocking program as at March 31, 2013.

Funds Unlocked in the Year Ending March 31, 2013

Reason of Financial

Hardship

Number of

Applications Received

Number of

Applications Approved

Dollar

Value of Funds

Released

Average

Release per Successful Application

Mortgage Foreclosure 76 37 $183,005 $4,946 Medical Expenses 30 15 $103,161 $6,877 Low Income 453 290 $2,856,201 $9,849

Total 559 342 $3,142,367 $9,188

Total Funds Unlocked since July 1, 2007 (program inception)

Reason of Financial

Hardship

Number of

Applications Received

Number of

Applications Approved

Dollar

Value of Funds

Released

Average

Release per Successful Application

Mortgage Foreclosure

427 210 $1,130,028 $5,381

Medical Expenses

188 96 $613,073 $6,386

Low Income

2453 1534 $13,813,974 $9,005

Total

3068 1840 $15,557,075 $8,455

Page 14

The following graph illustrates the number of financial hardship applications received per month over the last two fiscal years.

0

100

200

300

400

500

600

700

20082009

20102011

20122013

35 66 91 78

81 76

7 44 34 40 33

30

99

394 513

491 503 453

Number of Applications Received Under the Financial Hardship Program

Fiscal Years Ending March 31

Mortgage Foreclosure Medical Expenses Low Income

0

10

20

30

40

50

60

70

Apr May June July Aug Sept Oct Nov Dec Jan Feb Mar

Ap

plic

atio

ns

Financial Hardship Applications Received by Month

2011-2012 2012-2013

Page 15

The following graph shows the status of applications received per reason during 2012/2013. Incomplete means that a letter requesting further information was sent to an applicant, but no response was received.

In total, 559 applications were received, 342 were approved, 149 denied, and 68 were incomplete. Reasons for denial of applications include:

Funds not under Nova Scotia jurisdiction;

Funds still in a registered pension plan;

Applicant’s arrears are on a second mortgage with no threat of foreclosure, or for rent which is not a mortgage arrears criterion;

Earnings are too high to qualify for low income criterion.

37 15

290

36 11

102

3 4

61

0

50

100

150

200

250

300

350

Mortgage Foreclosure Medical Expenses Low Income

Nu

mb

er

of

Ap

plic

ants

Status of Financial Hardship Applications Received

Approved Denied Incomplete

Page 16

REVENUE AND EXPENDITURE FOR THE YEAR ENDED MARCH 31, 2013 Fees are payable in respect of all Applications for Registration of pension plans and for each Annual Information Return filed on a plan. The Registration and Annual Information filing fee was $5.35 for each member of the pension plan in Nova Scotia, or in a designated province, with a minimum fee of $107.05. The maximum fee was $8,029.21. A late filing fee is charged in respect of Annual Information Returns submitted more than six months after the end of the fiscal year of the pension plan. The additional fee is 50% of the regular fee. The fee payable for registration by a financial institution of a specimen Life Income Fund was $1,070.56. A fee of $267.63 was charged for amendments to Life Income Funds specimen contracts. The fee payable in respect of an approved application for unlocking pension benefits held in a Locked-in Retirement Account or a Life Income Fund is $107.05. The revenue derived from fees charged in respect of Applications for Registration, Annual Information Returns, Life Income Funds, and financial hardship unlocking amounted to $353,732.18. Effective April 1, 2013, fees were increased by 5.8%. Direct operating costs for the Division for the fiscal year 2012/2013 were $440,858.68. Note that overhead costs are not included in direct operating costs.

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APPENDIX A STATISTICAL INFORMATION The information provided in this appendix is based on statistical information obtained from Statistics Canada’s database on pension plans in Canada as at January 1st, 2012. As of this date, 107,820 members participated in 472 pension plans regulated by the Division. TYPES OF PLANS There are two main types of pension plans; a defined contribution plan or a defined benefit plan. Under a defined contribution plan, contributions required by the employer and/or employees are clearly defined. The resulting pension benefit for each employee is whatever can be provided or purchased by the accumulated contributions and investment earnings. A defined benefit plan contains a specific formula as to the amount of pension each member is to receive. Effectively, the employer/administrator guarantees to provide this level of benefits and it is necessary for an actuary to estimate periodically how large the fund should be and how much should be contributed to ensure adequate funding of the benefits. As of January 1, 2012, there were 32,328 Nova Scotia members participating in defined contribution plans, 130,056 participating in defined benefit plans and 14,042 in other types of composite/combination plans.

Membership in pension plans other than defined benefit and defined contribution plans is insignificant and has not been included in the above chart. Participation in defined

0

30000

60000

90000

120000

150000

2003 2004 2005 2006 2007 2008 20092010

20112012

Nova Scotia Membership in Pension Plans

Defined Contribution Defined Benefit

Page 18

contribution plans and defined benefit plans has increased between 2011 and 2012 while participation in combination plans has also increased.

As noted in the above chart, the number of defined benefit pension plans across Canada with Nova Scotia members declined 29% between 2002 and 2011 to 519 plans. The number of defined contribution plans with Nova Scotia members increased by 4.45% to 750 plans.

Reflecting the national trend, the number of defined contribution pension plans registered with Nova Scotia increased slightly by 0.92% between 2003 and 2012 to 326 plans. Defined benefit pension plans increased slightly by 6.1% from 2003 to 2012 to 139 plans. These plans were established primarily for shareholders/owners of companies.

0

200

400

600

800

2003 2004 20052006

20072008

20092010

20112012

Plans with Nova Scotia Members

Other Defined Benefit Defined Contribution

0

100

200

300

400

2003 2004 20052006

20072008

20092010

20112012

Plans Registered in Nova Scotia

Other Defined Benefit Defined Contribution

Page 19

JURISDICTION OF PLAN MEMBERSHIP AND MEMBERSHIP COVERAGE As of January 1, 2012, there were 1,392 pension plans in all jurisdictions covering 176,426 Nova Scotia Employees. The Division supervised 472 plans covering 107,820 members; 23,004 of these members were employed in other provinces. In the following two charts FE refers to plans of employers subject to federal jurisdiction such as interprovincial transportation and communication; NR means plans that are not registered like the provincial plans for Civil Servants, Teachers, Judges, Members of the Legislature, and employees of Sydney Steel, as well as federal plans for the Canadian Forces, the RCMP, the Federal Public Service and the Members of Parliament. .

020000400006000080000

100000

NS NB NL PE QC ON MB SK AB BC FE NR

84816

1622 402 0 1634 16899

268 28 1200 249 15673

53635

NS Members in Plans in Canada by Jurisdiction (Source: Statistics Canada - (Table 81) January 1, 2012)

0100200300400500600

NS NB NL PE QC ON MB SK AB BC FE NR

471

40 15 0 75

545

18 3 39 23

154

9

Pension Plans in Canada with NS Members (Source: Statistics Canada - (Table 81) January 1, 2012

Page 20

As shown in the two following graphs, participation by Nova Scotians in pension plans has not varied significantly since 2003. Currently in Nova Scotia, 34.9% of the total labour force and 41.9% of employed paid workers participate in pension plans. These numbers for Canada as a whole are 32.4% and 38.4% respectively. Note that with respect to labour force coverage, pension plan membership is potentially available to paid workers only; self-employed owners of unincorporated businesses, unpaid family workers and the unemployed are not eligible for membership.

0.0%

10.0%

20.0%

30.0%

40.0%

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Participation in Pension Plans Members as a % of Total Labour Force

Nova Scotia Canada

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Participation in Pension Plans Members as a % of Employed Paid Workers

Nova Scotia Canada

Page 21

Nova Scotia has a higher than average proportion of paid workers in the public sector, where pension coverage is very high. Currently 59.1% of Nova Scotia pension plan members are employed in the public sector, as illustrated in the following chart:

During the period 2003 to 2012, the number of pension plan members in Nova Scotia in the private sector increased slightly by 0.42%, compared with a 0.47% increase in the public sector. ASSET ANALYSIS As of January 1, 2011, defined benefit plans with Nova Scotia members held $389 billion in assets. Defined contribution plans held $15.6 billion and composite or combination pension plans held $50.1billion.

0100000200000300000400000500000600000

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Nova Scotia (Source: Statistics Canada (Table 5 membership) Jan. 1, 2012

Private Sector Members Public Sector Members Total Plan Members

Paid Workers Labour Force

0.0%20.0%40.0%60.0%80.0%

100.0%

20092010

20112012

3.1% 3.5% 3.1%

3.4%

10.8% 11.4% 11.1%

11.1%

86.1% 85.2% 85.5% 85.5%

Plans with Nova Scotia Members - Assets (Source: Statistics Canada(Table 12 membership) Jan 1, 2012)

Defined Contribution Other Defined Benefit

Page 22

A total of $12 billion was held in pension plans registered in Nova Scotia as at January 1, 2012. The majority, $9.7 billion, was held in defined benefit plans, with $1.2 billion in defined contribution plans and $1.1 billion in composite/combination plans.

For pension plans with members employed in Nova Scotia, public sector pension plan assets were $266.3 billion and private sector plan assets were $188.5 billion.

80.7%

10.1% 9.2%

Plans Registered in Nova Scotia Asset Distribution

Defined Benefit

Defined Contribution

Other

58.5%

41.5%

Public and Private Sector Plans Asset Distribution

Public Sector

Private Sector

Page 23

Of the $454.9 billion in assets held in pension plans with Nova Scotia members as at January 1, 2011, a significant portion of funds was held in non-registered plans (see the description of non-registered plans on page 19). Plans under the federal and Ontario jurisdictions with Nova Scotia members also held significant assets.

0

50

100

150

200

250

NL PE NS NB QC ON MB SK AB BC FJ NR

0.092 0 12.028

1.423 15.609

76.55

0.929 3.235 6.769 1.232

116.724

220.306

Ass

ets

by

juri

sdic

tio

n (

bill

ion

s)

Assets for Plans with NS Members (Source: Statistics Canada(Table 2 members in NS) Jan 1, 2012