BCTF Teachers’ Pension Plan

2015 Spring RA

pension plan consultations

Preamble

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Any pension plan design change is a crucial paradigm shift that will

impact members’ retirement decisions and their financial security in

retirement. Under consideration includes the way pension values

accrue and linkage to the CPP. Plan change which involves the most

open and transparent consultation with the widest number of plan

members is the most successful. An ancillary benefit of this process

will be more members pay attention to their pensions and have a fuller

understanding of why it is such a good plan.

All previous significant changes to the pension plan design were done

when the plan was under the unilateral control of the government.

This is the first time members will have input regarding the actual

pension plan calculation formula and is truly joint management of the

pension plan in action.

Why are we consulting members on pension plan change?

• To educate members about their pension plan

(features and pension income).

• To educate members about the changes in

retirement behaviour.

• To educate members about possible changes

to the pension plan.

• To engage members in a dialogue about

possible changes.

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What are some of the possible changes to the current plan?

• decouple from the CPP

• improve fairness

• increasing pension lifetime amount

• future service only (pension earned to date is a vested benefit that is unaltered).

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What are the range of options?

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Status Quo

Accrual rate for lifetime pension

• split rate

• 1.3% for salary below YMPE ($53,600) and 2.0% above.

Early-retirement Reduction Factor (ERF)

• 3.0% reduction

• for every year before the earliest of Factor 90 or age 60.

Bridge amount (0.7% x lesser of last year’s YMPE or HAS)

• additional pension amount that stops at 65.

What are the range of options?

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Option A

Accrual rate for lifetime pension

• single rate

• 1.80% for all salary.

Early-retirement Reduction Factor

• 3.0% reduction

• for every year before age 61.

Bridge amount

• folded into lifetime pension.

What are the range of options?

Option B

Accrual rate for lifetime pension

• single rate

• 1.80% for all salary.

Early-retirement Reduction Factor

• 3.5% reduction

• for every year before age 61.

Bridge amount

• folded into lifetime pension.

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What are the range of options?

Option C

Accrual rate for lifetime pension

• single rate

• 1.85% for all salary.

Early-retirement Reduction Factor

• 4.0% reduction

• for every year before age 61.

Bridge amount

• folded into lifetime pension.

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What are the range of options?

Option D

Accrual rate for lifetime pension

• single rate

• 1.85% for all salary.

Early-retirement Reduction Factor

• 3.0% reduction

• for every year before age 62.

Bridge amount

• folded into lifetime pension.

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What are the range of options?

Option E

Accrual rate for lifetime pension

• single rate

• 2.0% for all salary.

Early-retirement Reduction Factor

• 5.0% reduction

• for every year before age 62.

Bridge amount

• folded into lifetime pension.

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What are the range of options?

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Summary—numerical

Scenario Accrual Rate ERF Rate ERF Age

Status quo 1.30%/2.00% 3.00% 60

Option A 1.80% 3.00% 61

Option B 1.80% 3.50% 61

Option C 1.85% 4.00% 61

Option D 1.85% 3.00% 62

Option E 2.00% 5.00% 62

What are the range of options?

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Earliest retirement

Age 55

Age 70

Age 60

Age 75

Age 80

Age 85

Age 65

Canada Pension Plan

Old Age Security

Bridge amount

Lifetime pension

Summary—graphical

What might be changed on my

paycheque?

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Current plan Options

Member 12.50* / 14.00** range from 9.5 – 11.0

Employer 14.63* / 16.13** range from 13.6 – 15.2

Total 27.13* / 30.13** range from 23.1 – 26.2

Contribution rates as percentage of salary

* below YMPE ** above YMPE

What will the consultations look like?

a. visitation team

b. support

c. role of locals

d. survey.

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What will the consultations look like?

a. visitation team

• Executive Committee (EC) member

– introduction, motivation

– hear from members on design.

• staff or pension trustee

– present technical information

– answer questions.

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What will the consultations look like?

b. Support for Locals

• BCTF pensions webpage

• video messages

• direct email to BCTF:

TPPdesign@bctf.ca

• On-line information

− FAQ

− glossary

− schedule

− data tables.

• communication

− BCTF newsletter, website,

eBlasts

− Teachers’ Newsmagazine

• poster for Local use.

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What will the consultations look like?

c. role of locals

• support process

• encourage engagement

• schedule meetings to include all TPP members (BCTF, BCSSA, BCPVPA)

• venue.

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What will the consultations look like?

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d. survey

• on-line survey

• demographics of

participants

• option preference.

When will this happen?

• 2015 AGM—passed EC recommendation

• Spring RA—present draft plan

• June 15, 2015—locals scheduled visitations deadline

• Summer Conference

− training for Trustees, EC, Local Presidents

− electives.

• September 8, 2015

− support materials available

− Teacher NewsMagazine.

• Visitations—September to November.

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• January 2016—report and recommendations to EC

• Winter RA 2016—report and recommendations from EC

• 2016 AGM—pension option selected

• Spring 2016—partners inform Trustees of option

selected

• January 1, 2018—start date.

What else will happen?