THE RETIREMENT PLAN FOR NON-TEACHING EMPLOYEES OF SCHOOL DISTRICT NO. 43 (COQUITLAM) CONTRIBUTIONS

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1 CONTRIBUTIONS INDIVIDUAL MEMBERS: Required contributions are 4.9% of annual earnings up to the YMPE and 6.6% of annual earnings over the YMPE. In 2014 the YMPE is $52,500. Examples of contributions in 2014 would be: 12 month employee: Average Annual Contribution Average Biweekly Contribution a. Earnings of $31,200 per year ($1,200 biweekly) 4.9% of $31,200 $ 1, $ b. Earnings of $59,800 per year ($2,300 biweekly) 4.9% of $ $ 2, $ (after YMPE earnings reached) 6.6% of $ 7, $ $ 3, School term employee: a. Earnings of $26,400 per year ($1,200 biweekly) 4.9% of $26,400 $ 1, $ b. Earnings of $55,000 per year ($2,500 biweekly) 4.9% of $52,500 $ 2, $ after (YMPE earnings reached) 6.6% of $ 2, $ $ 2, BOARD: The Board does not contribute on behalf of individual members, but contributes amounts that the actuary estimates are needed to fund the benefits provided by the Plan. As a result of the Valuation dated December 31, 2011, this is calculated as 9.13% of covered payroll, including 7.93% for benefits earned, 1.2% for administration expenses. In addition, the Board currently pays 50% of retiree health and dental premiums. 1

2 PENSIONABLE SERVICE AND PENSIONABLE EARNINGS Prior to January 1, 1997 Each calendar year of participating in the Plan was considered as a year of pensionable service. This generally included periods of unpaid leaves of absence. Your pensionable earnings were your T4 earnings, excluding taxable benefits and allowances. After December 31, or more hours in a calendar year counts as one year of pensionable service and fractions of a year are granted for lesser hours. That is: 1 year if you work 1500 hours or more Pensionable earnings for those in this category are your T4 earnings, excluding taxable benefits and allowances. Also excluded are lump sum payments that do not relate to continuing service, such as banked vacation pay for unused vacations, banked overtime, unused sick leave entitlements (in other words payouts when you are leaving the service of the Board) 1200/1500 or 4/5 of a year if you work 1200 hours Pensionable earnings for those in this category are as above, but for calculating pension, pensionable earnings per year are grossed up to the rate that would apply to 1500 hours of work per year. Examples are: $16,000 earned working 1200 hours; pensionable service would be 4/5 year, but the earnings would be grossed up to $20,000 $12,000 earned working 1000 hours; pensionable service would be 2/3 year, but the earnings would be grossed up to $18,000 Effective January 1, 1997, during unpaid leave/absence, pensionable service will be credited only if contributions are made for the leave as per the Memorandum of Agreement signed by Board and the Local Union. 2

3 Normal retirement age is 65 The pension calculation is based on the following formula: Lifetime pension the YMPE is the previous year s YMPE: 1.3% x average of 3 highest consecutive years pensionable earnings to YMPE x years of pensionable service plus 2% x average of 3 highest consecutive years pensionable earnings above YMPE x years of pensionable service Examples for retirement at age 65 are: based on 15 years of pensionable service with average of 3 highest consecutive years pensionable earnings being $36,000 Calculation Annual Pension Monthly Pension Lifetime Pension 1.3% x $36,000 x 15 years $ 7, $ 7, $ based on 15 years of pensionable service with average of 3 highest consecutive years pensionable earnings being $52,700 (using the 2013 YMPE of $51,100) Calculation: Annual Pension Monthly Pension Lifetime Pension: 1.3% x $52,700 x 15 years $ 10, plus 2% x $1, x 15 years $ 10, $ Note: These calculations are for the normal benefit payable monthly for single life with a guarantee of 10 years. There would be an adjustment for a spousal benefit and for all other options. Spousal benefits are required if you have a spouse unless spouse waives rights to same. 3

4 You may receive an unreduced pension if: your age is 60 or more and have at least ten years of pensionable service OR your age is 55 or more and the combination of your age and years of pensionable service equals 80 (an example would be age 56 with 24 years of pensionable service) The pension calculation is based on the following formula: Lifetime pension the YMPE is the previous year s YMPE: 1.3% x average of 3 highest consecutive years pensionable earnings to YMPE x years of pensionable service plus 2% x average of 3 highest consecutive years pensionable earnings above YMPE x years of pensionable service Additional Bridge pension to age 65:.7% x average of 3 highest consecutive years pensionable earnings up to YMPE x years of pensionable service Examples are: based on age 60 with 15 years of pensionable service with the average of 3 highest consecutive years earnings being $36,000 Calculation Annual Pension Monthly Pension Lifetime Pension: 1.3% x $36,000 x 15 year $ 7, $ 7, $ Bridge Pension to Age 65: Plus to age 65: 0.7% x $36,000 x 15 years $ 3, $ based on age 56, with 24 years of pensionable service with the average of 3 highest consecutive years pensionable earnings being $53,000 (using the 2013 YMPE OF $51,100) Calculation: Annual Pension Monthly Pension Lifetime Pension: 1.3% x $51,100 x 24 $ 15, Plus 2% x $1,900 x 24 $ $ 16, $ 1, Bridge Pension to Age 65: Plus to age 65: 0.7% x 51,100 x 24 years $ 8, $ Note: These calculations are for the normal benefit payable monthly for single life with a guarantee of 10 yrs. There would be an adjustment for a spousal benefit and for all other options. Spousal benefits are required if you have a spouse unless spouse waives rights. 4

5 S If you take early retirement with a reduced pension, the formula on the two previous worksheets will apply, but the pension amounts will be reduced to take account of early pension commencement. You may receive a reduced pension if: your age is less 55 and the combination of your age and years of pensionable service equals 80 - there is no reduction for in respect of the pension earned for pensionable service before 1997 and - the reduction is 6% for each year before age 60 for pension earned for pensionable service after 1996 you have not reached the rule of 80 when you retire, but have 10 or more years of pensionable service - the reduction is 3% for each year, if any, before age 60 for pension earned for pensionable service before 1997 and - the reduction is 6% for each year, if any, before age 60 for pension earned for pensionable service after 1996 you have less than 10 years of pensionable service and are over age 60 when you retire - the reduction is 3% for each year, if any, before age 65 for pension earned for pensionable service before 1997 and - the reduction is 6% for each year, if any, before age 65 for pension earned for pensionable service after 1996 you have less then 10 years of pensionable service and are under age 60 when you retire - the reduction is an actuarial calculation from age 65 actuarial reductions vary but are normally in excess of 6% per year TO ACCESS THE PENSION CALCULATOR Go to the School District website, click on Departments, click on Finance, click on Pension Non-Teaching link, click on SD43 On Line Pension Calculator. You will need both an SD43 number and a P.I.N. 5

6 OPTIONS AVAILABLE ON RETIREMENT If you have a spouse who does not sign a spousal waiver If you do not have a spouse or have a spouse who signs a spousal waiver (See note 1) Normal benefit Options available Normal benefit Options available Monthly payments for life continuing at 60% to surviving spouse (see note 3): formula amount will be adjusted to provide spousal pension (see note 2) Continuation at higher rate (75% or 100%) to surviving spouse (see note 3) and/or a guarantee that payments will continue for at least 5 or 10 years pension amount will be adjusted to provide these options (see note 2) Payable monthly for life with a guarantee that payments will continue for at least 10 years No guarantee or 5-year guarantee: pension will be adjusted to provide these options (see note) Notes: 1. A spouse is permitted to waive the right to a spousal pension. Before accepting a spousal waiver, the committee requires that the spouse provide the committee with documentation that the spouse has received independent legal advise before signing the waiver. 2. The amount of pension paid is actuarially adjusted so that its value is the same as the value of a pension payable monthly for life with a guarantee that payments will continue for at least ten years. 3. The spousal definition has been redefined and now includes same sex partner with whom one has lived in a conjugal relationship for at least two years. 6

7 BENEFIT INCREASES AFTER PAYMENTS COMMENCE For pensionable service earned prior to January 1, 1997, the retiree s pension is automatically indexed as per the change in the Consumer Price Index (CPI) at December 31. The increase in payment commences April 1. For pensionable service earned after December 31, 1996, indexing will be paid up to a maximum of the CPI change over the previous year, but only to the extent that the Plan earns more than 7% interest. That is: if the Plan earns 6% and CPI is at 3%, no indexing will be paid for service earned after December 31, 1996; if the Plan earns 8% and CPI is at 3%, 1% indexing will be paid for service earned after December 31, 1996; if the Plan earns 10% and CPI is at 3%, then full indexing of 3% will be paid; and This section of the Plan was amended and effective April 1, 2002, if a valuation shows that the Plan has a surplus, that surplus will first be used to replace any missed pensioner increases for inflation. This will apply on a going-forward basis - future payments will be increased, but there will be no top-up of past pension payments. With this amendment, the Board s right to use surplus to reduce its contributions applies only after such missed increases have been replaced. Examples: If you retire with 25 years of pensionable service at December 31, 2014, pension earned with 7 years of pensionable service will receive full indexing, while pension earned with 18 years of pensionable service will depend upon the Plan earning more than 7% interest for indexing to be paid. However, the Plan Amendment will apply if the valuation of the Plan shows a surplus. If you retire with 15 years of pensionable service at December 31, 2014, pension earned during 15 years of pensionable service will depend upon the Plan earning more than 7% interest for indexing to be paid. Again, the Plan Amendment will apply if the valuation of the Plan shows a surplus. 7

8 MEDICAL SERVICES PLAN/EXTENDED HEALTH BENEFIT/DENTAL PREMIUMS As at January 1, 2014 Coverage Total Monthly Premium Employee Premium (50%) Employer Premium (50%) Medical Services Plan Single $ $ $ (see note) Couple $ $ $ Family $ $ $ Extended Health Benefits Single $ $ $ Couple $ $ $ Family $ $ $ Dental Single $ $ $ Couple $ $ $ Family $ $ $ Extended Health Benefit and Dental Premiums are reviewed annually and are subject to change. Medical Services Plan premiums are governed by M.S.P. of B.C. Note: If your net annual earnings are less than $30,000, you may be eligible for premium assistance. Please refer to the MSP website. 8

9 TERMINATION OF EMPLOYMENT OPTIONS AVAILABLE IF NON-VESTED Option A: Lump Sum Payment A cheque will be issued for member s accumulated contributions less withholding tax Option B: Delayed Payment The member can apply for payment of accumulated contributions to be made at a later date (but this must be within 10 years of termination date) Option C: Transfer into New Employer s Plan A Form T2151 has to be completed by the member and his/her new employer and accumulated contributions will be transferred Please note that not all pension plans permit funds to be transferred in from another pension plan. Option D: Deposit into an RRSP The member s accumulated contributions will be transferred directly into an RRSP OPTIONS AVAILABLE IF VESTED Option A: Deferred Pension The member leaves the funds with the Plan and receives a pension when eligible Option B: Deposit Transfer Amount into a Locked-In RRSP The Commuted Value will be transferred into an RRSP, but the moneys are locked in until the member is at least 55 Option C: Use the Transfer Amount of purchase a Deferred Annuity An annuity providing pension income can be purchased through an insurance company Option D: Transfer to New Employer s Pension Plan The commuted value can be transferred over to the member s new employer s plan Please note that not all pension plans permit funds to be transferred in from another pension plan. 9

10 BENEFITS ON DISABILITY You are entitled to a disability pension from the Plan if: you are under age 60 and have 10 years of retirement service; you have become totally and permanently disabled as determined by the Retirement Committee based on medical certification and eligibility for Canada Pension Plan disability benefits; you are unable to perform any suitable job; AND you have been disabled for at least 4 months. If you qualify you receive an immediate pension payable for life. The calculation would be similar to that of an unreduced pension on retirement, but with the following adjustments: the addition of 50% of the pensionable service you could have expected to accrue between the pension commencement date and age 60; there will be no Bridge Pension to age 65; there is no reduction for early retirement This means that if you become disabled at the age of 55 and have 15 years in the Plan, the calculation would be: 1.3% x average of 3 highest consecutive years pensionable earnings to YMPE x 15 years of pensionable service plus 2.5 years PLUS.7% x average of 3 highest consecutive years pensionable earnings above YMPE x 15 years of pensionable service plus 2.5 years 10