Retirement Planning Session Public Service Shared Risk Plan (PSSRP) 2015 Pensions & Employee Benefits Division (PEBD) Department of Human Resources http://www.gnb.ca/pssrp

http://www.gnb.ca/pssrp Disclaimer This presentation is for information purposes only. No rights are conferred by this presentation. The Public Service Shared Risk Plan Document and Funding Policy, the New Brunswick Pension Benefits Act, and the Income Tax Act supersede this presentation where discrepancies may occur. For authoritative wording regarding this pension plan, please refer to the Plan Document for the Public Service Shared Risk Plan.

Agenda Overview of PSSRP Benefits Payable upon Termination/Death http://www.gnb.ca/pssrp Agenda Overview of PSSRP Benefits Payable upon Termination/Death Other PSSRP Provisions Insured Benefits Other Key Points Questions

The Board of Trustees administers the PSSRP in accordance with: PSSRP Overview http://www.gnb.ca/pssrp PSSRP Governance A Board of Trustees is responsible for the administration of the PSSRP 6 individuals have been appointed as Trustees including: 3 union members 3 government members (includes 1 retiree) 2 observers The Board of Trustees administers the PSSRP in accordance with:

Employee Contributions Contribution rate increases when PSSRP Overview http://www.gnb.ca/pssrp Employee Contributions Current Rates 7.5% of earnings up to YMPE 10.7% of earnings in excess of YMPE YMPE: Year’s Maximum Pensionable Earnings under the Canada Pension Plan (CPP) – 2015 YMPE = $53,600. CPP deductions cease upon reaching the YMPE. Contribution rate increases when salary accumulation reaches YMPE

Vesting Entitlement to pension benefits PSSRP Overview http://www.gnb.ca/pssrp Vesting Entitlement to pension benefits Vesting under the PSSRP occurs upon the completion of the earlier of: Five years of continuous employment; or Two years of pensionable service in the PSSRP (including pensionable service in the Public Service Superannuation Act (PSSA)); or Two years of membership in the PSSRP, including membership in any of the following predecessor pension plans: The Pension Plan for Part-Time and Seasonal Employees of the Province of NB (PT&S); or The PSSA.

PSSRP Overview http://www.gnb.ca/pssrp Benefits Accumulated In determining the benefits accumulated, pensionable service needs to be separated as follows:

PSSRP Overview http://www.gnb.ca/pssrp Benefits Accumulated

Benefits Accumulated PSSRP Overview http://www.gnb.ca/pssrp Calculation prior to any early retirement reduction factor and Cost of Living adjustment

Bridge Benefit Prior to Age 65 PSSRP Overview http://www.gnb.ca/pssrp Bridge Benefit Prior to Age 65 The Bridge Benefit (also known as Integration) is intended to supplement your income until age 65, at which time it ceases and you are eligible for an unreduced CPP pension. CPP contributions are required on earnings up to YMPE. PSSRP contribution rates: lower on earnings up to YMPE, to recognize required contributions into two plans. higher on earnings above YMPE, as no CPP contributions.

Bridge Benefit Prior to Age 65 PSSRP Overview http://www.gnb.ca/pssrp Bridge Benefit Prior to Age 65 Benefit accrual rates are based on contribution rates. The bridge benefit under the PSSRP and your CPP benefits may not be the same amount. The PSSRP bridge benefit is payable as early as age 55, regardless of age at which CPP pension begins.

Active Member Calculation PSSRP Overview http://www.gnb.ca/pssrp Active Member Calculation COLA assumed to be 1.7% each year Same concept applies to benefits payable at age 65 Calculation prior to any early retirement reduction factor

Early Retirement Reduction Factors PSSRP Overview http://www.gnb.ca/pssrp Early Retirement Reduction Factors

Cost of Living Adjustment PSSRP Overview http://www.gnb.ca/pssrp Cost of Living Adjustment Each year, based on the funding level of the PSSRP, it will be determined whether the plan is able to provide indexation – also known as Cost of Living Adjustment (COLA): The financial report (Actuarial Valuation) will outline the funding level of the PSSRP; and The PSSRP’s Funding Policy will outline how much COLA could be provided (up to average change in Consumer Price Index (CPI)). The PSSRP is designed to provide average cost of living adjustments in excess of 75% of the CPI over a 20 year period. When COLA is provided, it will apply to active employees, retirees and deferred members.

PSSRP Overview http://www.gnb.ca/pssrp Statement of Benefits

Pension Estimate Calculator PSSRP Overview Pension Estimate Calculator Can be used with or without the information provided on your Employee Statement of Pension Benefits. The Calculator Tool is located on our website at: http://www.gnb.ca/pssrp Example of a plan member approaching retirement: Employee will be 59 years old on Nov. 30th/15 will be terminating employment on Nov. 30th/15 Pension start date of Dec. 1st/15 Information on statement:

Pension Estimate Calculator PSSRP Overview http://www.gnb.ca/pssrp Pension Estimate Calculator

Pension Estimate Calculator Results PSSRP Overview http://www.gnb.ca/pssrp Pension Estimate Calculator Results (3% x 1 year) (5% x 6 years) Gross amounts

Forms of Pension Joint & Survivor at 50%* Joint & Survivor at 60% PSSRP Overview http://www.gnb.ca/pssrp Forms of Pension There are various forms of pension at retirement: Joint & Survivor at 50%* Joint & Survivor at 60% Joint & Survivor at 100% Life Pension – 5 Year Guarantee Life Pension – 10 Year Guarantee Life Pension – 15 Year Guarantee Normal Form of Pension

Forms of Pension Joint and Survivor at 50% PSSRP Overview http://www.gnb.ca/pssrp Forms of Pension Joint and Survivor at 50% Payments made during lifetime of retiree. If retiree dies before spouse, payments continue to spouse (spouse at date of death) for remainder of spouse’s life. 50% of pension amount at age 65 (before application of any early retirement reductions) payable to spouse, or eligible dependent if spouse dies or no spouse. If member has a spouse, a Spousal Waiver form must be completed by the member’s spouse at time of retirement.

Forms of Pension Joint and Survivor at 60% or 100% PSSRP Overview http://www.gnb.ca/pssrp Forms of Pension Joint and Survivor at 60% or 100% Payments made during lifetime of retiree. If retiree dies before spouse, payments continue to spouse (spouse at date of retirement) for remainder of spouse’s life. 60% or 100% of pension amount at age 65 (after application of any early retirement reductions) is payable to spouse. If no spouse or if spouse dies, 50% of pension amount at age 65 (before application of any early retirement reductions) is payable to eligible dependent.

Forms of Pension Life Pension Guarantee (5, 10 or 15 Years) PSSRP Overview http://www.gnb.ca/pssrp Forms of Pension Life Pension Guarantee (5, 10 or 15 Years) Payments made during lifetime of retiree. If retiree dies before end of guarantee period, the Designated Beneficiary receives the remaining pension payments (being the pension payable at age 65, after application of any early retirement reductions) through monthly installments. If member has a spouse, a Spousal Waiver form must be completed by the member’s spouse at time of retirement.

Designated Beneficiary PSSRP Overview http://www.gnb.ca/pssrp Designated Beneficiary A member may designate a beneficiary or beneficiaries to receive any benefit which may be payable under the terms of the PSSRP upon the death of the member. Upon the death of the member, if there is no spouse, eligible dependent or designated beneficiary, any death benefits will be payable to the member’s estate. If an active or deferred member designates a person other than his/her spouse as a beneficiary, the entitlement of the spouse shall supersede the entitlement of the beneficiary to a death benefit.

Preliminary Retirement Statement PSSRP Overview http://www.gnb.ca/pssrp Preliminary Retirement Statement Under the Income Tax Act, an optional form of pension cannot be larger than the Normal Form of Pension (Option A).

Schedule of Pension Payments PSSRP Overview http://www.gnb.ca/pssrp Schedule of Pension Payments Paid on the 24th of each month Pension Benefit begins the month after you become eligible Upon the death of a pensioner Date of termination May 10th First payment June 24th Date of death Last payment May 24th

Termination Benefits If a member is not vested: Benefits Payable upon Termination/Death http://www.gnb.ca/pssrp Termination Benefits If a member is not vested: Member receives a refund of their contributions with interest. The amount is payable as cash or can be directly transferred into an RRSP.

Termination Benefits If a member is vested (prior to age 55) Benefits Payable upon Termination/Death http://www.gnb.ca/pssrp Termination Benefits If a member is vested (prior to age 55) Member can defer their pension benefit; If the member defers their pension, the pension can begin as early as age 55 (reduced) and no later than age 65 (unreduced). OR Member can elect to transfer the Termination Value to a retirement savings arrangement on a locked-in basis (LIRA, LIF, etc.) The Termination Value will not be less than the member’s contributions plus interest

Termination Benefits If a member is vested (on or after age 55) Benefits Payable upon Termination/Death http://www.gnb.ca/pssrp Termination Benefits If a member is vested (on or after age 55) The member has the following options: Choose to begin receiving their pension immediately; or Defer their pension benefit until a date between their 55th and 65th birthday and receive a reduced pension benefit; or Defer their pension benefit until age 65 and receive an unreduced pension.

Death Benefits Prior to retirement (Non-Vested Member) Benefits Payable upon Termination/Death http://www.gnb.ca/pssrp Death Benefits Prior to retirement (Non-Vested Member) Refund of member’s contributions with interest to member’s surviving spouse or designated beneficiary/estate if there is no spouse.

Death Benefits Prior to retirement (Vested Member) Benefits Payable upon Termination/Death http://www.gnb.ca/pssrp Death Benefits Prior to retirement (Vested Member) If member has a spouse, the spouse has the option to: receive a monthly pension benefit of 50% of the amount payable at age 65 (before application of early retirement reductions); or receive a lump sum payment equal to the Termination Value. If member does not have a spouse, the designated beneficiary/estate will receive a lump sum payment equal to the Termination Value. If an eligible dependent is the designated beneficiary, a monthly pension as described above is available instead of the Termination Value. The entitlement of the spouse shall supersede the entitlement of any beneficiary designation.

Benefits Payable upon Termination/Death http://www.gnb.ca/pssrp Death Benefits At retirement (If a member dies after pension commenced) The death benefit will be paid in accordance with the form of pension benefit the member elected at retirement.

Purchase of Pensionable Service Other PSSRP Provisions http://www.gnb.ca/pssrp Purchase of Pensionable Service A member may be able to purchase the following periods of service (certain restrictions apply): Previously refunded service Authorized leave without pay (e.g., maternity) Prior non-contributory full-time and part-time service (e.g., casual employment) Long Term Disability Waiting Period MLA Service

Purchase of Pensionable Service Other PSSRP Provisions http://www.gnb.ca/pssrp Purchase of Pensionable Service The cost to purchase service varies depending on the type of service being purchased. In most cases, the cost to purchase service will be the greater of: one times the current contribution rate; or the adjusted termination value.

Reciprocal Transfer Agreements Other PSSRP Provisions http://www.gnb.ca/pssrp Reciprocal Transfer Agreements A reciprocal transfer agreement (RTA) permits the portability of pension benefits between pension plans. Currently there are RTAs between the PSSRP and: the Pension Plan for Part-Time and Employees of the Province of New Brunswick (PT&S); the national public service pension plans (this includes all 10 provinces); and the Government of Canada Public Service pension plan. Other reciprocal transfer agreements are being negotiated. Members will be notified when new agreements come into effect.

Marriage Breakdown Provisions Other PSSRP Provisions http://www.gnb.ca/pssrp Marriage Breakdown Provisions The pension plan permits the division of pension assets upon marriage breakdown. This applies to agreements, judgments or court orders dated after December 31, 1996. Our office will determine, based on an actuarial calculation, the eligible amount available for division based on the agreement, judgment or court order. Funds are transferred on a locked-in basis. There are no provisions in the pension plan for purchasing the lost benefits as a result of a marriage breakdown.

Work Time Flexibility Program Other PSSRP Provisions http://www.gnb.ca/pssrp Work Time Flexibility Program Only full-time members of the PSSRP who are within five years of retirement may apply. Reduce work schedule (as low as 50% of full-time). Pay contributions on full-time salary. Receive full-time pension credit. Subject to Employer Approval and CRA limitations. Elected retirement date is irrevocable.

Dental Insurance Dental Benefits Insured Benefits http://www.gnb.ca/pssrp Dental Insurance Dental Benefits Transfer from Active Plan to Retiree Plan. You are only eligible to continue in the plan if you are participating in as an active employee in the UNB Dental Plan. Monthly Premium Single Coverage Family Coverage $20.15 $40.29

Other Key Points You should inform your employer at least six months in advance of your retirement date to ensure you receive your pension in the month following your termination date. The PSSRP Employee Booklet is available on our website which provides detailed information on the provisions of the plan. Pension estimates can be calculated using the Pension Calculator Tool available on our website: http://www.gnb.ca/pssrp. Formal pension estimates can be requested if you are within 12 months of your retirement date. If you have questions regarding the pension options available at retirement, please contact one of our Benefits Counselors.

Contact Information

Additional Information http://www.gnb.ca/pssrp Additional Information

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