1. Pension Seminar for non-teaching pension plan members
Presented by Betty Bolton
Retiree Representative for Retirement Committee

2. Disclaimer
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.

3. Introduction contd.
Committee Members: For the Board: For the Union: Jasson Chadha Yvonne Jovanovic Mark Ferrari Tom MacDonald Chris Nicolls Stan Marshall Kimberley Wakil Irene Schoemaker For the Retirees: Betty Bolton

4. Introduction contd.
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 Greystone Managed Investments – Real Estate and Mortgages

5. What do I need to know?

6. 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.

7. General pension plan background
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, and pre January 1, 1997 throughout the Plan Text and in pension calculations The Pension Benefits Standards Act (British Columbia) was re-written in 2014, with regulations introduced in 2015, requiring amendments to the Plan Text.
A summary of the revised Plan Text is contained in the pamphlet found on the Pension website entitled “The Retirement Plan for Non-teaching Employees”.

8. General pension plan background
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 have to 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.
As of January 1, 1998, as a casual worker or part time employee, you become eligible to join if you have completed two consecutive calendar years of employment and have received salary of 35% or more of the YMPE in each of the two consecutive calendar years. If you chose not to join when you were first eligible, you can still join at the beginning of any subsequent period.
You will be advised 60 days prior to the date when you are first eligible to join the Plan. If your participation is optional, you may opt out by providing such instructions in the form required by the School District.

9. What contributions can I make to the Plan?

10. How much do I contribute to the plan?
Employee required contributions to the Plan are: % of annual earnings up to the YMPE % of annual earnings over the YMPE
In 2016 the YMPE (Years’ Maximum Pensionable Earnings under Canada Pension) is $54,900

11. How much does the board contribute to the plan?
Under Pension Regulation the actuary is required to value the Plan at least every three years. The most recent complete valuation performed by our actuary is as of December 31, 2013 and that valuation requires that the Board contributes at a rate of 9.31% of covered payroll which includes:
8.11% for benefits earned in the year by members
1.2% administration allowance
The Board also pays 40% of the cost of retiree health and dental premiums

12. May I make additional voluntary contributions?
Subject to certain tax limits, you may make additional voluntary contributions to the Plan, but you can not purchase additional pensionable service with them. On resignation or retirement, these contributions, accumulated with interest, may be taken in cash, less applicable tax, or transferred tax-free to your RRSP.

13. CONTRIBUTIONS DURING A LEAVE OF ABSENCE
For leaves of absence after 1996, pension credits may be granted, but only if both Member and Board Contributions are paid to the Plan.
In some circumstances, based on the applicable collective agreement, the Board may pay your required contributions during a leave of absence. In other cases you may elect to pay both your and the Board’s required contributions during a leave of absence.
It is important to note that, regardless of who makes the contribution, they are treated as required Member and Board contributions respectively.

14. MAY I DISCONTINUE CONTRIBUTIONS?
Other than for specified leave of absence situations, you may not discontinue your required contributions while your employment with the Board continues.
You may stop voluntary contributions at any time, but they cannot be withdrawn except on termination of employment or retirement.

15. Definitions you need to know

16. PENSIONABLE SERVICE & EARNINGS
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.

17. Pensionable service & earnings – contd.
Pre-January 1, 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.

18. PENSIONABLE SERVICE & EARNINGS – CONTD.
Post December 31, or more hours worked 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 hours, but your pensionable earnings are grossed up by that same percentage, so your pensionable earnings would be as if you worked hours.

19. WHEN CAN I RETIRE
????

20. When can I retire on pension?
Normal retirement age is 65
The formula for the lifetime pension is: 1.3% x average of 3 highest consecutive years’ pensionable earnings to the YMPE x years of pensionable service plus 2% x average of 3 highest consecutive years’ pensionable earnings above the YMPE (of the previous year) x years of pensionable service

21. Am I eligible to retire on an unreduced pension?
You may receive an unreduced pension if:
Your age is 60 or more and you 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 lifetime pension calculation is the same as for normal retirement and the bridge pension to age 65 is: .7% x average of 3 highest consecutive years’ pensionable earnings up to the YMPE (of the previous year) x years of pensionable service.

22. Can I retire on a reduced pension?
You may receive a reduced pension if:
Your age is less than 55 and the combination of your age and years of pensionable service equals 80 There is no reduction in respect to the pension earned for pensionable service before January 1, and a reduction of 6% for each year before age 60 for pension earned for pensionable service after December 31, 1996.

23. CAN I RETIRE ON A REDUCED PENSION (contd.)?
Your age is less than 55 and you have not reached the ‘rule of 80’ when you retire, but you 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 January 1, 1997 and 6% for each year before age 60 for pension earned for pensionable service after December 31, 1996.

24. PENSION PAYMENT OPTIONS: WHAT ARE THEY AND WHAT DO THEY MEAN?
If you have a spouse who does not sign a spousal waiver:
Normal benefit: 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).
Options available: Continuation at a higher rate (75% or 100%) to surviving spouse (see note 3) and/or guarantee that payments will continue for at least 5 or 10 years. Pension amount will be adjusted to provide these options (see note 2).

25. PENSION PAYMENT OPTIONS …CONT’D.
If you do not have a spouse or have a spouse who signs a spousal waiver (See note 1)
Normal benefit: Payable monthly for life with a guarantee that payments will continue for at least 10 years.
Options available: Lifetime pension with no guarantee or 5-year guarantee. Member with spouse can elect pension continuing at less than 60% to the surviving spouse. The pension will be adjusted to provide these options (see note 2).

26. PENSION PAYMENT OPTIONS …CONT’D
Notes to previous 2 slides:
A spouse is permitted to waive the right to a minimum 60% survivor pension. Before accepting a spousal waiver, the committee requires that the spouse provide the committee with documentation that the spouse has received independent legal advice before signing the waiver.
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.
The spousal definition is as per the Income Tax Act, a person with whom one has lived in a conjugal relationship for at least two years.

27. DO PENSION BENEFITS INCREASE 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 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. 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.

28. 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. 60% of the premiums are paid by deduction from the retiree’s monthly pension cheque; 40% 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.

29. Reciprocal service Effects of Reciprocal Agreements
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.

30. ITEMS TO TAKE INTO CONSIDERATION
Monthly Expenses – be realistic
Projected monthly income – pension SD43/Resources/Pension/Links), CPP, OAS, other
Reduction in pension benefit?
Long term service payouts – seniority?

31. THE DECISION IS MADE!!!
Write the letter to Human Resources! If retirement is voluntary, 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

32. 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 pre- January 1, 1997 and post-December 31, Choose wisely – there is no going back!

33. 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.

34. BENEFITS ON LEAVING SERVICE OF THE BOARD
If you meet eligibility rules, the Payroll Department will contact you regarding the following:
Long term service
Sick Leave Gratuity
Vacation Pay
Banked Overtime
Pension Plan Voluntary Contributions

35. Termination of employment
All plan members are now vested immediately. “Vested” means you are eligible for a pension. Following are the options available if you leave the employment of the Board before you are eligible to retire:
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

36. 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

37. 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

38. WHAT HAPPENS TO MY PENSION IF I DIE BEFORE RETIREMENT?
Benefits payable on death before retirement:
No spouse 100% of the commuted value of the member’s accrued pension is paid to named beneficiary or estate
With a spouse The spouse is entitled to an immediate pension equal in value to the member’s accrued pension with the following adjustments: - service projected to age the additional bridge to age 65 will not apply If the member was eligible for retirement at the date of death, the spouse can take a spousal pension as if the member had retired with the joint and 100% survivor optional form.

39. POTENTIOAL ADJUSTMENTS TO PENSION BENEFIT PAYMENTS
In certain situations benefits may be restricted and in certain situations an additional benefit may be paid.
Can benefits be restricted? Yes. Benefit amounts are subject to maximum benefit limits set out in the Income Tax Act. Where the Plan formula would give an amount that is greater than the limit, the pension will be restricted to the applicable limit. These limits are likely to apply only to members with very high earnings.

40. Potential adjustments to pension plan payments … cont’d
What are excess contributions? Where a member’s contributions accumulated with interest exceed 50% of the commuted value of the pension at retirement, death, or termination of employment, the “excess contributions” will be paid as a lump sum, less applicable taxes. Pare or all of it may be eligible for a tax-free rollover to an RRSP
Are small pensions paid? If the commuted value of your pension is less than 20% of the YMPE, you can elect to have the pension value paid to you as a lump sum. The plan reserves the right to force the benefit out of the plan by making a cash payment or a transfer to your RRSP in lieu of a monthly pension benefit.

41. Other pension-related items
Family Law Act
Pension “vesting”
Vesting means you are eligible for pension and, with the new legislation, is effective immediately.
Deferred Pension
Beneficiary designation

42. Where can I go for more information?

43. Information sources Through your home computer:
Go to the Pension website
Access your SD43 website
Click on Resources>>Pension>>Links
Go to the Pension Calculator website
To login, ensure you know your personal SD43 number and PIN provided on your last Annual Pension Statement
Access other websites

44. Information sources—cont’d
Read the Newsletters sent to you semi-annually in January and June
Review your Annual Pension Statement produced annually in June
Refer to the Plan Pamphlet “The Retirement Plan for Non-teaching Employees”
Refer to Seminar Handouts for specific Plan Contributions and Health Benefits
Contact Irene Schoemaker or call at
Contact a Retirement Committee Plan Member (refer to list provided)
Discuss your financial goals and Pension options with your bank, and your financial planner

45. Other considerations for retirement “savings”
Federal Tax-free Savings Accounts (TFSA) effective January 2009
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) or $5,500 since 2013
Voluntary contributions through our Pension Plan
Contact the Payroll Department for more information
Buybacks of Pensionable Service for Leaves in excess of 15 consecutive days through our Pension Plan
Forms are available on the Pension website
CSB purchase through Payroll Department or outside banks

46. Are you ready for retirement??
FAQ’s and other Questions

47. A HAPPIER RETIREMENT!
LIFESTYLE PLANNING
INFO GATHERING