Transcript Pension 43

PENSION SEMINAR
FOR NON-TEACHING
PENSION PLAN
MEMBERS
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April 20, 2013
Presented by Betty Bolton
Retiree Representative for Retirement Committee
AGENDA
INTRODUCTION
OVERVIEW
PENSION
CALCULATOR &
WEBSITE
• Betty Bolton,
• Retirement Committee Members
• Ifigenia Fasogiannis, Citizen Services Specialist, Service Canada
• Nonteaching Pension Plan --background, payment and benefit options, other retirement
considerations
• How to access and use the Pension Plan website and Pension Plan Calculator
• Estimating pension payments and assessing benefit options
• Gathering information to make better informed choices
• As Canadians, what we can expect to receive
• Planning for Early Retirement
CPP & OAS
• FAQ’s, other questions and comments
CLOSING
REMARKS
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DISCLAIMER

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
This presentation highlights important features
of the Non-teaching Pension Plan. It does not,
however, replace the official Plan documents
which legally govern the Plan.
In the event of inconsistencies between the
Pension Seminar Notes and the Plan documents,
the Plan documents govern Pension application.
If you require additional information in terms of
retirement planning, we suggest you seek advice
from a professional financial advisor.
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INTRODUCTION
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About 1/3 of Canada’s 33 million people are born
between 1946 and 1962. Canadians approaching
retirement represent the fastest growing demographic
in the country (Vancouver Sun).
Only 1/3 of the older workers are worried about
whether they’ll have adequate income when they
leave the workforce (Stats Canada).
The remaining 2/3 are under the delusion they’ll be
“air-tight” upon retirement.
Demographics raise some concern: more seniors than
ever (1 in 7 a senior in 2006; 50 years ago, 1 in 14 was
a senior).
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INTRODUCTION CONTD.

Committee Members:
For the Board:
Michelle Daycock
Gail Dowler
Chris Nicolls
Kimberley Wakil
For the Union:
Tom MacDonald
Stan Marshall
Bruce Richardson
Irene Schoemaker
For the Retirees
Betty Bolton
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INTRODUCTION CONTD.
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Professional Organizations
- Aon Hewitt
- RBC Dexia
- Barkman and Tanaka
- Lawson Lundell and Lawson
- Investment Companies
Aberdeen – global equities
Fidelity Investments Pyramis Trusts –
Canadian equities and bonds
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What do I need to know?
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GENERAL PENSION PLAN BACKGROUND

Our Pension Plan is a defined benefit Pension Plan
Written contract by which the employer and employees are
required to make monetary contributions with a view to
provide employees with retirement income.
 The amount of your pension is set in advance according to
a precise formula.
 The amount of the contributions is determined by the
actuary who carries out the Plan’s actuarial valuation.


You know in advance the amount of your retirement
pension

In general, the amount corresponds to a percentage times
the years of pensionable service times the average of the
highest three consecutive years’ earnings.
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GENERAL PENSION PLAN BACKGROUND
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The Plan began in May, 1955 and has been
amended from time to time since then. The Plan
Text was re-written, almost in its entirety, in
1996 to conform to the Pension Benefits
Standards Act (British Columbia) and the Income
Tax Act (Canada). As a result, you will find
references to post December 31, 1996 and pre
January 1, 1997 throughout the Plan Text. The
last amendment occurred in January, 2011.
A summary of the Plan Text is contained in the
pamphlet found on the Pension website entitled
“The Retirement Plan for Non-teaching
Employees”.
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GENERAL PENSION PLAN BACKGROUND

Effective January 1, 1987, participation in the Plan
became compulsory for all new employees:

You are eligible to join the Plan if you are employed by the
school board as a non-teaching employee and meet Plan
criteria.

You must join the plan on your date of appointment if you
are appointed on a permanent basis to a permanent
position and work at least 20 appointed hours per week.
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As of January 1, 1998, as a casual worker or part time
employee, you became eligible to join if you have completed
two consecutive calendar years of employment and have
received salary of 35% or more of the YMPE ($16,905 in
2011) in each of the two calendar years. If you choose not
to join when you are first eligible, you can still join at the
beginning of any subsequent period.
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What contributions can I make
to the Plan?
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HOW MUCH DO I CONTRIBUTE TO THE
PLAN?
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Employee required contributions to the Plan are:
- 4.9% of annual earnings up to the YMPE
- 6.6% of annual earnings over the YMPE
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In 2013 the YMPE (years’ maximum pensionable
earnings under Canada Pension) is $51,100
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HOW MUCH DOES THE BOARD CONTRIBUTE
TO THE PLAN?
The most recent complete valuation is as of
December 31, 2011. This valuation requires that
the Board contributes at a rate of 9.13% of covered
payroll which includes:
7.93% for benefits earned in the year by members
 1.2% administration allowance
 The Board also pays 50% of the cost of retiree
health benefits
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MAY I MAKE ADDITIONAL VOLUNTARY
CONTRIBUTIONS?
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CONTRIBUTIONS DURING A LEAVE OF
ABSENCE
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MAY I DISCONTINUE CONTRIBUTIONS?
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Definitions you need to
know
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PENSIONABLE SERVICE &
EARNINGS
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Pensionable service is a measure of the time you
have been contributing to the Plan and does not
necessarily have a direct relationship to your
length of service with the Board nor with your
seniority.
Pensionable earnings are the earnings on which
your contributions and pension are based.
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PENSIONABLE SERVICE & EARNINGS –
CONTD.
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Pre-January 1, 1997
Each calendar year of participation in the Plan
was considered as a year of pensionable service.
This generally included leaves of absence.
Your pensionable earnings for this period are
your T4 earnings, excluding taxable benefits and
allowances.
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PENSIONABLE SERVICE &
EARNINGS – CONTD.
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Post December 31, 1996
1500 or more hours in a calendar year
counts as one year of pensionable service and your
pensionable earnings are your T4 earnings, excluding
taxable benefits and allowances, and lump sum
payouts when leaving the Board.
Less than 1500 hours
Pensionable service is calculated as a percentage of
1500 hours, but your pensionable earnings are
grossed up by that same percentage, so your
pensionable earnings would be as if you worked 1500
hours.
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WHEN CAN I
RETIRE
????
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WHEN CAN I RETIRE ON PENSION?
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WHAT $ WOULD I RECEIVE (UNREDUCED
PENSION)?
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WHAT $ WOULD I RECEIVE (REDUCED
PENSION)?
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WHAT $ WOULD I RECEIVE (REDUCED
PENSION)?
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PENSION PAYMENT OPTIONS: WHAT ARE
THEY AND WHAT DO THEY MEAN?
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PENSION PAYMENT OPTIONS…CONT’D
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DO PENSION PAYMENT AMOUNTS CHANGE
AFTER PENSION COMMENCEMENT?
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HEALTH BENEFITS
Currently a retiree may elect coverage under the
basic Medical Services Plan of B.C., as well as
extended health and dental plans in B.C. Half
the premiums are paid by deduction from the
retiree’s monthly pension cheque; the other half
is paid by the Board.
 Effective July 1, 2002, Plan members retiring can
elect to take benefit coverage only at time of
retirement or upon involuntary loss of coverage
at a later time.
 Current premium rates are on page 8 of your
worksheets.
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RECIPROCAL SERVICE
Effects of Reciprocal Agreements
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The Plan is party to reciprocal arrangements
with Public Sector Plans of B.C. (Municipal,
Teaching, College, Public Service)
Importance of April 1, 2004 date to participants.
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BEFORE YOU WRITE THAT LETTER!
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Monthly Expenses – be realistic
Projected monthly income – pension (calculator @
SD43/Resources/Pension/Links), CPP, OAS, other
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Reduction in pension benefit?
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Long term service payouts – seniority?
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IT’S A GO!!!
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Write the letter to Human Resources!
Make sure you give adequate notice!
Generally, it is recommended that your
retirement date is close to the end of the month
because:
- pensions are only paid for complete months|
- pensions are deposited in your bank account
on the 1st of the month
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WHAT HAPPENS NEXT – PENSION?
Aon Hewitt completes all calculations
 You will receive an information package from
Aon Hewitt showing:
Option A – spousal benefit with 60% to survivor
Option B – spousal benefit with 75% to survivor
Option C – spousal benefit with 100% to survivor
Option D – single life
All with no guarantee, 5 year guarantee or 10
year guarantee
All options are further broken down into preJanuary 1, 1997 and post-December 31, 1996
Choose wisely – there is no going back!
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FORMS TO BE SIGNED RE PENSION
Pension Option form
 Bank deposit form
 TD1 Income Tax forms
 Acceptance or declining of health benefits form
 Medical Services Plan application
 Extended Health and Dental Benefits form

Return completed forms either directly to Aon
Hewitt or via the Board Office.
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BENEFITS ON LEAVING SERVICE OF
THE BOARD
If you meet eligibility rules, payroll will contact you
regarding the following:
Long term service
 Sick Leave Gratuity
 Vacation Pay
 Banked Overtime
 Pension Plan Voluntary Contributions
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TERMINATION OF EMPLOYMENT
Options available if non-vested:
 Option A: Lump Sum Payment
 Option B: Delayed Payment
 Option C: Transfer to New Employer’s Plan
 Option D: Deposit into an RRSP
Options available if vested:
 Option A: Deferred Pension
 Option B: Deposit Transfer Amount into RRSP
 Option C: Use Transfer Amount to purchase
Annuity
 Option D: Transfer to New Employer’s Plan
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DISABILITY PENSION
You are entitled to a disability pension if:
 You are under age 60 and have 10 years of
retirement service
 You have become totally and permanently
disabled as determined by the Committee and
eligibility for Canada Pension Plan disability
 You are unable to perform any suitable job AND
 You have been disabled for at least four months
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DISABILITY BENEFIT
If you qualify, you receive an immediate pension
for life. The calculation is similar to that of an
unreduced pension with following adjustments:
An addition of 50% of pensionable service you
expected to accrue between pension
commencement date and age 60;
 No bridge pension to age 65;
 No reduction for early retirement
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WHAT HAPPENS TO MY PENSION IF I DIE
BEFORE RETIREMENT?
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POTENTIAL ADJUSTMENTS TO PENSION
BENEFIT PAYMENTS
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POTENTIAL ADJUSTMENTS TO PENSION
PLAN PAYMENTS…CONT’D
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OTHER PENSION-RELATED ITEMS
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Family Relations Act
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www.qp.gov.bc.ca
Pension “vesting”

Vesting means you are eligible for pension and
occurs after 2 years of Plan membership, or, if you
were a plan member before 1998, after 5 years
continuous employment
Deferred Pension
 Beneficiary designation
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Where can I go for more
information?
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INFORMATION SOURCES
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Through your home computer:
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Go to the Pension website
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Go to the Pension Calculator website
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Access your SD43 website
Click on Resources>>Pension>>Links
www.aoncanada.com/SD43
 To login, ensure you know your personal SD43 number and
PIN provided on your last Annual Pension Statement
Access other websites
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www.cra-arc.gc.ca
www.servicecanada.gc.ca
www.qp.gov.bc.ca
www.pensionsbc.ca
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INFORMATION SOURCES—CONT’D
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Read the Newsletters sent to you semi-annually in January and June
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Review your Annual Pension Statement produced annually in June
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Refer to the Plan Pamphlet “The Retirement Plan for Non-teaching
Employees”
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Refer to Seminar Handouts for specific Plan Contributions and Health
Benefits
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Contact Irene Schoemaker ([email protected]) or call at 604-937-6715
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Contact a Retirement Committee Plan Member (refer to list provided)
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Discuss your financial goals and Pension options with your bank, and your
financial planner
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OTHER CONSIDERATIONS FOR RETIREMENT
“SAVINGS”
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Federal Tax-free Savings Accounts (TFSA) effective
January 2009
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Voluntary contributions through our Pension Plan
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Contact the Payroll Department for more information
Buybacks of Pensionable Service for Leaves in excess
of 15 consecutive days through our Pension Plan
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Contact your local bank/credit union for more info
You are eligible to make up to $5,000 in annual
contributions (retro to the 2009 tax year)
Forms are available on the Pension website
CSB purchase through Payroll Department or
outside banks
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We have given you some
tools to work with….
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ARE YOU READY FOR RETIREMENT??
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FAQ’s and other Questions
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INFO GATHERING
LIFESTYLE PLANNING
A HAPPIER RETIREMENT!
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