SHARED RISK PLAN FOR ACADEMIC EMPLOYEES OF UNB (AESRP) Pre-Retirement Seminar UNB Human Resources & Organizational Development

History Pre Province of NB expresses concern over pension inequities caused by differences between regular PSSA Plan Members’ salaries and those of UNB Faculty Members. Pre Province of NB expresses concern over pension inequities caused by differences between regular PSSA Plan Members’ salaries and those of UNB Faculty Members. UNB and the AUNBT create AEPP. Plan provisions mirrored the PSSA (NB). UNB and the AUNBT create AEPP. Plan provisions mirrored the PSSA (NB) – 85-Factor Unreduced Early Retirement integrated 1998 – 85-Factor Unreduced Early Retirement integrated

History (cont) 2003 – CPP integration age changes from age 65 to age 60 AND Pension Escalation capped at 4.5% (previously 6%) 2003 – CPP integration age changes from age 65 to age 60 AND Pension Escalation capped at 4.5% (previously 6%) 2004 – Pension Escalation capped at 0.5% plus the lesser of excess return on the fund over 7.75% or the excess of the 3- year average percentage increase in the Pension Index over the increase in the CPI to a maximum of 0.5% AND same-sex survivors’ pensions added 2004 – Pension Escalation capped at 0.5% plus the lesser of excess return on the fund over 7.75% or the excess of the 3- year average percentage increase in the Pension Index over the increase in the CPI to a maximum of 0.5% AND same-sex survivors’ pensions added 2007 – Accrual rate changed from 1.3% / 2.0% to 1.0% / 1.7% 2007 – Accrual rate changed from 1.3% / 2.0% to 1.0% / 1.7% 2013 – Parties agree to convert Plan to a Shared Risk Plan. Accrual rate initially set at 1.1% / 1.8% 2013 – Parties agree to convert Plan to a Shared Risk Plan. Accrual rate initially set at 1.1% / 1.8%

Contribution Rate History StartEndContrib Rate to YMPE Contrib Rate above YMPE Unfunded Liability ($)/ Funded Ratio (%) January 1, 1993June 30, %8.60% July 1, 1995December 31, %8.80%$641,000 January 1, 1998June 30, %8.84%$5,485,000 July 1, 2000June 30, %9.33%$9,268,000 July 1, 2003June 30, %11.00%$22,518,000 July 1, 2006June 30, %12.22%$46,943,000 July 1, 2007June 30, %10.81%$46,545,256 July 1, 2009June 30, %11.35%$55,700,000 July 1, 2010June 30, %12.38%$61,557,985 July 1, 2011December 31, %13.15%$74,499,412 January 1, 2013June 30, %13.97%111.0% July 1, 2013June 30, %12.25%113.0%

Shared Risk Pension (SRP) Model The Parties agreed that, effective July 1, 2013, the Plan was to be converted to a Shared-Risk Plan. The Shared-Risk Plan “targets” a base benefit that reflects the defined-benefit pension model that was used previously. Some of the major changes of the Plan were: Final 5-Year Average Salary Plan is changed to an enhanced career average plan. Final 5-Year Average Salary Plan is changed to an enhanced career average plan. Indexing is conditional upon the funded status of the Plan – is targeted at 75% of indexing formula Indexing is conditional upon the funded status of the Plan – is targeted at 75% of indexing formula Early retirement reduction is the “actuarial equivalent” Early retirement reduction is the “actuarial equivalent”

Contributions to the AESRP Shared equally between you and UNB (50/50) Shared equally between you and UNB (50/50) 10.55% of earnings to YMPE ($53,600 in 2015) 10.55% of earnings to YMPE ($53,600 in 2015) 12.25% of earnings above YMPE EXAMPLE For a $120,000 Salary, the calculation is as follows: 53,600 X 10.55% = $5, (120,000 – 53,600) X 12.25% = 8, $13, $13, UNB SHARE $13, TOTAL $27,577.60

Eligibility for Retirement Pension 2 years of Plan Membership 2 years of Plan Membership REDUCED PENSION 55 years of age or older 55 years of age or older - reduction for retiring early is equal to the “actuarial equivalent” to the normal form of pension UNREDUCED PENSION For Service Up to the Date of Conversion - Anytime your age plus years of service is equal to or greater than 85 OR 65 years of age, whichever is earlier For Service Up to the Date of Conversion - Anytime your age plus years of service is equal to or greater than 85 OR 65 years of age, whichever is earlier For All Other Service - 65 years of age For All Other Service - 65 years of age

Five Factors that Determine your Pension Entitlement 1. Salaries - The average of your 5 highest years’ salary to June 30, The 3-year average of the YMPE - Actual salaries and YMPE’s from July 1, PTR Scale 2. Pensionable Service Equal to the total of - service to June 30, service between July 1, 2007 and June 30, service after July 1, disability service earned while in receipt of a benefit from UNB’s LTD program - purchased service 3. Reduction Factor for Age (if applicable) 4. Pension Accrual Rates 5. Conditional Indexing

Examples of Pension Calculations UNREDUCED RETIREMENT AT AGE 65 Pre-Conversion Pension – “Base Benefit” Factors: 5-Year Average Salary:$100,000 3-Year Average YMPE:$49,833 Years of Pensionable Service to June 30, 2007:15 years Years of Pensionable Service between July 1, 2007 and June 30, 2013:6 years Post-Conversion Pension Factors: July 1, 2013 Salary:$110,000 January 1, 2014 Salary:$112,000 July 1, 2014 Salary:$114,000 January 1, 2015:$116, YMPE:$51, YMPE:$52, YMPE:$53,600

UNREDUCED RETIREMENT AT AGE 65 (cont.) Pre-Conversion Pension – “Base Benefit” 2.0% X 100,000 X 15=30, % X 100,000 X 6= +10, % X 49,833 X 21= -7,326 Annual Age 65 AEPP Pension= $32,874 Post-Conversion Pension % X 110,000 X 0.5= % X 51,100 X 0.5=-179 $ % X 112,000 X 0.5=1, % X 114,000 X 0.5= +1, % X 52,500=- 368 $1,666 $1, % X 116,000 =2, % X 53,600 =- 375 $1,713 Total Pension at January 1, 2016 $37,064

REDUCED RETIREMENT AT AGE 62 *Reduction only applies to Post-Conversion Pension due to the Factor of 85 Pre-Conversion Pension – “Base Benefit” 2.0% X 100,000 X 15=30, % X 100,000 X 6= +10, % X 49,833 X 21= -7,326 Annual Age 65 AEPP Pension= $32,874 Post-Conversion Pension % X 110,000 X 0.5 X 82%= % X 51,100 X 0.5 X 82%=-147 $ % X 112,000 X 0.5 X 82%= % X 114,000 X 0.5 X 82%= % X 52,500 X 82%=-301 $1,367 $1, % X 116,000 X 82%=1, % X 53,600 X 82%=- 308 $1,404 Total Pension at January 1, 2016 $36,310

REDUCED RETIREMENT AT AGE 62 Without having achieved the Factor of 85 Pre-Conversion Pension 2.0% X 100,000 X 15=30, % X 100,000 X 6= +10, % X 49,833 X 21= -7,326 Total before reduction=$32,874 Less Red for Age (6%/12 X 36 months) =-18% Pre-Conversion Reduced Pension=$26,957 Post-Conversion Pension % X 110,000 X 0.5 X 82%= % X 51,100 X 0.5 X 82%=-147 $ % X 112,000 X 0.5 X 82%= % X 114,000 X 0.5 X 82%= % X 52,500 X 82%=-301 $1,367 $1, % X 116,000 X 82%=1, % X 53,600 X 82%=- 308 $1,404 Total Pension at January 1, 2016 $30,393

Post-Retirement Indexation The target is 75% of the prior plan formula for indexation. Also, for years where no indexation was given and where the funded status of the Plan is sufficient enough, catch-ups are allowed.

Canada Pension Plan Retirement Pension In 2015, the maximum annual Canada Pension Plan benefit is as follows (6.96% per year reduction before age 65): At age 65 $12,780 At age 64$11,937 At age 63$11,001 At age 62$10,112 At age 61$ 9,222 At age 60 $ 8,333

Death After Retirement When you die, 60% of your AESRP Pension will be paid to your surviving spouse on a monthly basis. When you die, 60% of your AESRP Pension will be paid to your surviving spouse on a monthly basis. Dependants’ pensions will be shared to surviving children under 18 if there is no surviving spouse. Dependants’ pensions will be shared to surviving children under 18 if there is no surviving spouse. If there are no dependants and your contributions and interest exceed the pension payments already received, the difference will be refunded to your Estate. If there are no dependants and your contributions and interest exceed the pension payments already received, the difference will be refunded to your Estate. * The Pension Board may also grant a survivor’s pension to a disabled child over age 18, or to another member of your family who was dependant on you at the time of death.

NB Public Service Shared Risk Plan (PSSRP) If you worked full-time at UNB prior to January 1, 1993, you probably qualify for pension benefits from the Public Service Shared Risk Plan. For information concerning this pension plan, you can consult the website at the following address: urces/pensions_and_benefits.html urces/pensions_and_benefits.html For personal service, contact UNB Human Resources or the Province directly Province of New Brunswick Pensions & Benefits Division Local calls

“Factor-85” Post-Retirement Benefits Factor-85 Faculty Members qualify for the following benefits on a 50/50 cost share basis until June 30 th following the attainment of age 65: 1. Health & Dental Coverage * 2. Group Life Insurance * These would normally be paid 100% by the retiree.

Retirement Allowance (Faculty) UNB employees with 5 or more years of continuous full-time service are eligible for a retirement allowance payable the month after they retire. The retirement allowance is normally equivalent to 1 week’s (5 days’) pay for each year of service up to a maximum of 25 weeks. It is based on the annual salary at retirement.

Retirement Allowance (cont) In the Memorandum of Understanding regarding the elimination of Mandatory Retirement, a special provision was included that affects the amount of retirement allowance retirees will receive. If retirement occurs at a time later than the NRD, the retirement allowance shall be decreased by 20% for each year until age 70 at which time the entitlement is zero. If an employee commits in writing to a specific retirement date on or before the NRD, the retiree will receive an additional amount equal to 5% for each 6 months of retirement prior to the employee’s NRD. The maximum additional benefit that an retiree can receive is 30% of their retirement allowance.

Group Benefits for Post-65 Active Employees 1. LTD terminates at December 31 st before NRD 2. Optional Benefits terminate at NRD 3. Group Life terminates at NRD but has a guaranteed conversion option. 4. Pension contributions and accrual continue 5. Participation in the UNB Extended Health Plan continues but is 100% employee paid. 6. NB Prescription Drug Plan (100% ee paid) 7. NB Civil Service Retirees’ Dental Plan (100% ee paid) 8. Healthcare Spending Account (100% UNB paid)

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