Nova Scotia Fund Returns 7.93% in Fiscal 2024

The Novia Scotia Pension Services Corp., which manages four pension funds in the province of Nova Scotia, announced that its Public Service Superannuation Plan returned 7.93% in the fiscal year ending March 31. In April, the corporation reported a 7.38% return for the Teachers’ Pension Plan for its fiscal year, which ended December 31, 2023.

The corporation manages the pension investments of four defined benefit plans in Nova Scotia: the Teachers’ Pension Plan, the Public Service Superannuation Plan, the Members of the Legislative Assembly Pension Plan and the Sydney Steel Corp. Superannuation Fund. The pensions have more than 79,600 plan members, with a combined C$13.7 billion ($10 billion) in assets.

The corporation’s pension fund returns are in line with other Canadian plans during the fiscal year. CPP Investments returned 8%, PSP Investments returned 7.2% and British Columbia Investment Management 7.5%.

While Nova Scotia’s PSSP achieved a return of 7.93%, this figure was below the fund’s policy benchmark of 9.96%, yet better than its actuarial rate of return of 5.75%.

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Pension assets of the PSSP rose to C$7.906 billion at the end of the period. Pension liabilities stood at C$7.619 billion. Like many of its Canadian peers, the fund has a funding surplus, with a funded status of 103.8%.

The Teachers’ Pension Plan achieved a 7.38% return in its fiscal year, below its 10.14% benchmark but above its 5.80% actuarial rate of return. Assets of the fund grew to C$5.759 billion, with liabilities reaching C$7.376 billion. The funded status of the TPP increased to 78.1% at the end of the fiscal year, up from 75.1% in the prior year.

The TPP noted in its announcement that higher benchmarks for its real assets portfolio, an asset class that has become a common source of underperformance across pension funds across the world, were primary among the reasons the plans did not exceed their benchmarks.

“With the PSSP, the TPP’s overall benchmark for fiscal 2023 was a challenging one, primarily due to the higher, inflation-linked benchmarks for the real asset components of the portfolio,” the corporation’s annual report stated. “But, also in line with the PSSP, the TPP demonstrated strong absolute performance for the combined calendar years of 2023 and 2024, having near top-quartile placement among its Canadian peers.”

PSSP allocates 30.88% of its assets to fixed income and 27.62% to equities. Real assets comprise 30.32% of the portfolio, with absolute-return strategies and cash having allocations of 9.23% and 1.95%, respectively.

The TPP allocates 24.35% of its portfolio to fixed income, 31.61% to equities, 31.32% to real assets, 8.83% to absolute-return strategies and 2.89% to cash.