The College Pension Plan Benefits & Governance Dominique Roelants, Ph.D., LLB, Executive Officer, College Pension Plan

The College Pension Plan Outline ▪Governance ▸ Partners ▸ Board ▸ “Corporate Structure” ▪Benefit ▸ Old Formula ▸ New Formula ▸ How we got there

Governance Plan Partners ▪Partners are: ▸ BCGEU ▸ FPSE ▸ PSEA ▸ BC Government ▪Agree on the Joint Trust ▪Can Change the Joint Trust Agreement ▸ All partners have a veto ▪Can direct Board to make change to Plan Rules ▸ All partners have a veto

Governance Trustees ▪Employee Trustees (3 FPSE, 1 BCGEU, 1 Retiree appointed jointly) ▪Employer Trustees (4 Government, 1 PSEA appointed active member) ▪Can change the plan rules - some restrictions ▪Can veto plan partner directives ▪Must give advice to partners if they are thinking of directing board

Governance Organization ▪Secretariat (Direct Board Support) ▪Pension Corporation ▪bcIMC

Benefits Old Formula ▪Life Time Pension: (HAS - YMPE) * Yrs * 2% + YMPE * Yrs * 1.7% ▪Bridge Benefit: YMPE * Yrs * 0.3% ▪Eg average salary over last 5 years of $102,500 and retire this month with 20 years of full time service: ▸ Pension = $50,000 * 20 * $52,500 * 20 * ▸ = $20,000 + $17,850 = $37,850/year ▸ And if under 65 would get an additional $52,500 * 20 * 0.003=$3,150 ▸ So total would be $41,000/year before 65 and $37,850 after ▸ If retire before 60, pension will be reduced by 0.25% per month before 60th birthday

Benefits New Formula (applies only to service earned after 2015) ▪Formula is HAS * Yrs * 2% ▪Pension is reduced by 0.25% foreach month the person retired before the age of 65.

Benefits How did we get there? ▪Partners discussed possible reform options to determine which plan design changes were viable ▪FPSE surveyed members on possible options (RRU participated in survey) ▪Members supported move to full 2% pension even if it meant reducing pension from 65 ▪Average member no worse off with new formula and reduction age

Questions?