WGA’s $ 3.65 billion retirement plan on solid footing and getting stronger

Exclusive: Despite the pandemic, the WGA’s $ 3.65 billion pension plan is in “good shape” and has been better funded over the past three years, according to the plan’s latest funding report, which says its funding level puts it at 88.8%. The so-called “green zone”. In the Green Zone plans, which are those with the highest level of financing, the financed interest – which is the assets divided by the liabilities – exceeds 80%.

“We are delighted to announce that the 2021 Pension Plan has maintained its green zone status and is expected to remain green zone for the foreseeable future,” the statement read. “Following the discipline of long-term investment criteria, in the last 30 years until the end of 2021, the pension plan reached an average annual salary of around 10%. The directors are closely following the financial markets and resign if necessary to protect the long-term viability of the pension plan.

In 2019, the plan included $ 3.22 billion in assets and $ 3.75 billion in liabilities, with 85.7% of interest funded. In 2020 it had $ 3.41 billion in assets and $ 3.95 billion in liabilities, with a funded interest rate of 86.2%. In 2021 it had $ 3.65 billion in assets and $ 4.11 billion in liabilities, with an interest rate of 88.8%. In other words, assets have grown faster than liabilities over the past three years.

As of January 1, 2021, the plan had 19,400 participants and beneficiaries, of which 9,338 are active employees; 5,518 retired and received benefits, while 4,544 retired or no longer worked for their employer and are entitled to future benefits.

“Since 2010, the directors have taken further steps to improve the financial condition of the pension plan,” the note read. “One of the reasons the plan is in such good shape today compared to some of its peers is that while the benefits continue with a 48.3% down payment credit, up to 6.0% compensation, directors, plenty. As a precaution, the pension plan has been modified to ensure that contributions paid by employers of no more than 6.0% of pay are used to accumulate additional benefits, but are used to ensure the liquidity of the pension plan.

“This change was made in anticipation of a new amendment to the minimum basic agreement, which from 2 May 2011 brought the required contribution rate to the pension plan from 6% to 7.5% of the salary; Up to 7.75% of the compensation on May 2, 2012; Up to 8% of the remuneration on May 2, 2013, up to 8.5% on May 2, 2014; Up to 10% of the compensation on January 1, 2021; Up to 10.5% on May 2, 2021 and up to 11.5% on May 2, 2022. Simply put, over 6% of the contribution is used to promote the financial health of the plan.

The pension plans, the note reads, “are intended to provide benefits over a very long period of time and we have a long-term investment strategy that allows you to use the pension plan over time to remedy difficult financial situations”. Fluctuations in the financial markets are taken for granted … CEOs continue to manage their retirement plans wisely, taking into account past history and notable future trends. Pension payments are made from the pension plan as promised and funds are appropriately allocated to adequately secure future pension benefits. The Board of Directors continues with the successful investment philosophy: an adequate long-term investment; Observe investment results and market conditions and act wisely with professional advice.

The plan states that you currently own 40% of your assets in stock; 20.8% quality of investment in loan instruments; 8.8% in real estate, 5.7% in high-income debt securities; and 24.7% in “other” investments.