SHARED RISK PLAN FOR SHARED RISK PLAN FOR ACADEMIC EMPLOYEES ACADEMIC EMPLOYEES

OF UNB (AESRP)OF UNB (AESRP)Pre-Retirement SeminarPre-Retirement Seminar

UNB Human Resources & UNB Human Resources & Organizational DevelopmentOrganizational Development

HistoryHistory Pre-1993 - Province of NB expresses concern over pension Pre-1993 - Province of NB expresses concern over pension

inequities caused by differences between regular PSSA Plan inequities caused by differences between regular PSSA Plan Members’ salaries and those of UNB Faculty Members. Members’ salaries and those of UNB Faculty Members.

UNB and the AUNBT create AEPP. Plan provisions mirrored UNB and the AUNBT create AEPP. Plan provisions mirrored the PSSA (NB).the PSSA (NB).

1998 – 85-Factor Unreduced Early Retirement integrated1998 – 85-Factor Unreduced Early Retirement integrated

History (cont)History (cont) 2003 – CPP integration age changes from age 65 to age 60 2003 – CPP integration age changes from age 65 to age 60

AND Pension Escalation capped at 4.5% (previously 6%)AND Pension Escalation capped at 4.5% (previously 6%) 2004 – Pension Escalation capped at 0.5% plus the lesser of 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-excess return on the fund over 7.75% or the excess of the 3-year average percentage increase in the Pension Index over the year average percentage increase in the Pension Index over the increase in the CPI to a maximum of 0.5% AND same-sex increase in the CPI to a maximum of 0.5% AND same-sex survivors’ pensions addedsurvivors’ 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. 2013 – Parties agree to convert Plan to a Shared Risk Plan.

Accrual rate initially set at 1.1% / 1.8%Accrual rate initially set at 1.1% / 1.8%

Contribution Rate HistoryContribution Rate HistoryStart End Contrib

Rate to YMPE

Contrib Rate above YMPE

Unfunded Liability ($)/ Funded Ratio (%)

January 1, 1993 June 30, 1995 6.90% 8.60%

July 1, 1995 December 31, 1997 7.10% 8.80% $641,000

January 1, 1998 June 30, 2000 7.14% 8.84% $5,485,000

July 1, 2000 June 30, 2003 7.63% 9.33% $9,268,000

July 1, 2003 June 30, 2006 9.30% 11.00% $22,518,000

July 1, 2006 June 30, 2007 10.52% 12.22% $46,943,000

July 1, 2007 June 30, 2009 9.11% 10.81% $46,545,256

July 1, 2009 June 30, 2010 9.65% 11.35% $55,700,000

July 1, 2010 June 30, 2011 10.68% 12.38% $61,557,985

July 1, 2011 December 31, 2012 11.45% 13.15% $74,499,412

January 1, 2013 June 30, 2013 12.27% 13.97% 111.0%

July 1, 2013 June 30, 2014 10.55% 12.25% 113.0%

Shared Risk Pension (SRP) Shared Risk Pension (SRP) ModelModel

The Parties agreed that, effective July 1, 2013, the Plan was to be The Parties agreed that, effective July 1, 2013, the Plan was to be converted to a Shared-Risk Plan. converted to a Shared-Risk Plan.

The Shared-Risk Plan “targets” a base benefit that reflects the The Shared-Risk Plan “targets” a base benefit that reflects the defined-benefit pension model that was used previously.defined-benefit pension model that was used previously.

Some of the major changes of the Plan were:Some of the major changes of the Plan were:Final 5-Year Average Salary Plan is changed to an enhanced Final 5-Year Average Salary Plan is changed to an enhanced career average plan.career average plan.Indexing is conditional upon the funded status of the Plan – is Indexing is conditional upon the funded status of the Plan – is targeted at 75% of indexing formulatargeted at 75% of indexing formulaEarly retirement reduction is the “actuarial equivalent”Early retirement reduction is the “actuarial equivalent”

Contributions to the AESRPContributions 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 YMPE12.25% of earnings above YMPE

EXAMPLEEXAMPLEFor a $120,000 Salary, the calculation is as follows: For a $120,000 Salary, the calculation is as follows: 53,600 X 10.55% 53,600 X 10.55% = $5,654.80= $5,654.80(120,000 – 53,600) X 12.25% (120,000 – 53,600) X 12.25% = = 8,134.008,134.00

$13,788.80$13,788.80UNB SHAREUNB SHARE $13,788.80 $13,788.80TOTALTOTAL $27,577.60$27,577.60

Eligibility for Retirement PensionEligibility for Retirement Pension 2 years of Plan Membership2 years of Plan Membership

REDUCED PENSIONREDUCED PENSION 55 years of age or older55 years of age or older

- reduction for retiring early is equal to the “actuarial - reduction for retiring early is equal to the “actuarial equivalent” to the normal form of pension equivalent” to the normal form of pension

UNREDUCED PENSIONUNREDUCED PENSION For Service Up to the Date of Conversion - Anytime For Service Up to the Date of Conversion - Anytime

your age plus years of service is equal to or greater your age plus years of service is equal to or greater than 85 OR 65 years of age, whichever is earlierthan 85 OR 65 years of age, whichever is earlier

For All Other Service - 65 years of ageFor All Other Service - 65 years of age

Five Factors that Determine your Five Factors that Determine your Pension EntitlementPension Entitlement

1.1. Salaries Salaries - The average of your 5 highest years’ salary to June 30, 2013- The average of your 5 highest years’ salary to June 30, 2013- The 3-year average of the YMPE- The 3-year average of the YMPE- Actual salaries and YMPE’s from July 1, 2013- Actual salaries and YMPE’s from July 1, 2013- PTR Scale- PTR Scale

2.2. Pensionable Service Pensionable Service Equal to the total ofEqual to the total of- service to June 30, 2007- service to June 30, 2007- service between July 1, 2007 and June 30, 2013- service between July 1, 2007 and June 30, 2013- service after July 1, 2013- service after July 1, 2013- disability service earned while in receipt of a benefit from UNB’s LTD - disability service earned while in receipt of a benefit from UNB’s LTD programprogram- purchased service- purchased service

3.3. Reduction Factor for Age (if applicable)Reduction Factor for Age (if applicable)4.4. Pension Accrual RatesPension Accrual Rates5.5. Conditional IndexingConditional Indexing

Examples of Pension CalculationsExamples of Pension CalculationsUNREDUCED RETIREMENT AT AGE 65UNREDUCED RETIREMENT AT AGE 65

Pre-Conversion Pension – “Base Benefit”Pre-Conversion Pension – “Base Benefit”Factors:Factors:5-Year Average Salary:5-Year Average Salary: $100,000$100,0003-Year Average YMPE:3-Year Average YMPE: $49,833$49,833Years of Pensionable Service Years of Pensionable Service to June 30, 2007:to June 30, 2007: 15 years15 yearsYears of Pensionable Service Years of Pensionable Service between July 1, 2007 and June 30, 2013:between July 1, 2007 and June 30, 2013: 6 years6 yearsPost-Conversion PensionPost-Conversion PensionFactors:Factors:July 1, 2013 Salary:July 1, 2013 Salary: $110,000$110,000January 1, 2014 Salary:January 1, 2014 Salary: $112,000$112,000July 1, 2014 Salary:July 1, 2014 Salary: $114,000$114,000January 1, 2015:January 1, 2015: $116,000$116,0002013 YMPE:2013 YMPE: $51,100$51,1002014 YMPE:2014 YMPE: $52,500$52,5002015 YMPE:2015 YMPE: $53,600$53,600

UNREDUCED RETIREMENT AT AGE 65 (cont.)UNREDUCED RETIREMENT AT AGE 65 (cont.)Pre-Conversion Pension – “Base Benefit”Pre-Conversion Pension – “Base Benefit”2.0% X 100,000 X 152.0% X 100,000 X 15 == 30,00030,0001.7% X 100,000 X 61.7% X 100,000 X 6 == +10,200 +10,2000.7% X 49,833 X 210.7% X 49,833 X 21 == -7,326-7,326 Annual Age 65 AEPP PensionAnnual Age 65 AEPP Pension == $32,874$32,874Post-Conversion PensionPost-Conversion Pension201320131.8% X 110,000 X 0.51.8% X 110,000 X 0.5 == 990 9900.7% X 51,100 X 0.50.7% X 51,100 X 0.5 == -179-179

$811$811201420141.8% X 112,000 X 0.51.8% X 112,000 X 0.5 == 1,0081,0081.8% X 114,000 X 0.51.8% X 114,000 X 0.5 == +1,026 +1,0260.7% X 52,5000.7% X 52,500 == - 368- 368

$1,666$1,666201520151.8% X 116,000 1.8% X 116,000 == 2,0882,0880.7% X 53,600 0.7% X 53,600 == - 375- 375

$1,713 $1,713 Total Pension at January 1, 2016Total Pension at January 1, 2016 $37,064$37,064

REDUCED RETIREMENT AT AGE 62REDUCED RETIREMENT AT AGE 62*Reduction only applies to Post-Conversion Pension due to the Factor of 85*Reduction only applies to Post-Conversion Pension due to the Factor of 85

Pre-Conversion Pension – “Base Benefit”Pre-Conversion Pension – “Base Benefit”2.0% X 100,000 X 152.0% X 100,000 X 15 == 30,00030,0001.7% X 100,000 X 61.7% X 100,000 X 6 == +10,200+10,2000.7% X 49,833 X 210.7% X 49,833 X 21 == -7,326-7,326 Annual Age 65 AEPP PensionAnnual Age 65 AEPP Pension == $32,874$32,874Post-Conversion PensionPost-Conversion Pension201320131.8% X 110,000 X 0.5 X 82%1.8% X 110,000 X 0.5 X 82% == 812 8120.7% X 51,100 X 0.5 X 82%0.7% X 51,100 X 0.5 X 82% == -147-147

$665$665201420141.8% X 112,000 X 0.5 X 82%1.8% X 112,000 X 0.5 X 82% == 827 8271.8% X 114,000 X 0.5 X 82%1.8% X 114,000 X 0.5 X 82% == +841+8410.7% X 52,500 X 82%0.7% X 52,500 X 82% == -301-301

$1,367$1,367201520151.8% X 116,000 X 82%1.8% X 116,000 X 82% == 1,7121,7120.7% X 53,600 X 82%0.7% X 53,600 X 82% == - 308- 308

$1,404$1,404Total Pension at January 1, 2016Total Pension at January 1, 2016 $36,310$36,310

REDUCED RETIREMENT AT AGE 62REDUCED RETIREMENT AT AGE 62Without having achieved the Factor of 85Without having achieved the Factor of 85

Pre-Conversion PensionPre-Conversion Pension2.0% X 100,000 X 152.0% X 100,000 X 15 == 30,00030,0001.7% X 100,000 X 61.7% X 100,000 X 6 == +10,200+10,2000.7% X 49,833 X 210.7% X 49,833 X 21 == -7,326-7,326 Total before reductionTotal before reduction == $32,874$32,874Less Red for Age (6%/12 X 36 months) Less Red for Age (6%/12 X 36 months) == -18%-18%Pre-Conversion Reduced PensionPre-Conversion Reduced Pension == $26,957$26,957Post-Conversion PensionPost-Conversion Pension201320131.8% X 110,000 X 0.5 X 82%1.8% X 110,000 X 0.5 X 82% == 812 8120.7% X 51,100 X 0.5 X 82%0.7% X 51,100 X 0.5 X 82% == -147-147

$665$665201420141.8% X 112,000 X 0.5 X 82%1.8% X 112,000 X 0.5 X 82% == 827 8271.8% X 114,000 X 0.5 X 82%1.8% X 114,000 X 0.5 X 82% == +841+8410.7% X 52,500 X 82%0.7% X 52,500 X 82% == -301-301

$1,367$1,367201520151.8% X 116,000 X 82%1.8% X 116,000 X 82% == 1,7121,7120.7% X 53,600 X 82%0.7% X 53,600 X 82% == - 308- 308

$1,404$1,404Total Pension at January 1, 2016Total Pension at January 1, 2016 $30,393$30,393

Post-Retirement IndexationPost-Retirement Indexation

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

Canada Pension PlanCanada Pension Plan

Retirement PensionRetirement Pension

In 2015, the maximum annual Canada Pension In 2015, the maximum annual Canada Pension Plan benefit is as follows (6.96% per year Plan benefit is as follows (6.96% per year reduction before age 65):reduction before age 65):

At age 65 At age 65 $12,780$12,780

At age 64At age 64 $11,937$11,937

At age 63At age 63 $11,001$11,001

At age 62At age 62 $10,112$10,112

At age 61At age 61 $ 9,222$ 9,222

At age 60 At age 60 $ 8,333$ 8,333

Death After RetirementDeath After Retirement When you die, 60% of your AESRP Pension will be paid to When you die, 60% of your AESRP Pension will be paid to

your surviving spouse on a monthly basis. your surviving spouse on a monthly basis.

Dependants’ pensions will be shared to surviving children Dependants’ pensions will be shared to surviving children under 18 if there is no surviving spouse.under 18 if there is no surviving spouse.

If there are no dependants and your contributions and interest If there are no dependants and your contributions and interest exceed the pension payments already received, the difference exceed the pension payments already received, the difference will be refunded to your Estate.will be refunded to your Estate.

* The Pension Board may also grant a survivor’s pension to a * The Pension Board may also grant a survivor’s pension to a disabled child over age 18, or to another member of your disabled child over age 18, or to another member of your family who was dependant on you at the time of death.family who was dependant on you at the time of death.

NB Public Service Shared Risk NB Public Service Shared Risk Plan (PSSRP)Plan (PSSRP)

If you worked full-time at UNB prior to January 1, 1993, you If you worked full-time at UNB prior to January 1, 1993, you probably qualify for pension benefits from the Public Service probably qualify for pension benefits from the Public Service Shared Risk Plan. For information concerning this pension Shared Risk Plan. For information concerning this pension plan, you can consult the website at the following address:plan, you can consult the website at the following address:http://www2.gnb.ca/content/gnb/en/departments/http://www2.gnb.ca/content/gnb/en/departments/

human_resources/pensions_and_benefits.htmlhuman_resources/pensions_and_benefits.htmlFor personal service, contact UNB Human Resources or the For personal service, contact UNB Human Resources or the

Province directlyProvince directly

Province of New BrunswickProvince of New BrunswickPensions & Benefits Division Pensions & Benefits Division 1-800-561-40121-800-561-4012Local calls Local calls 453-2296453-2296

““Factor-85” Post-Retirement Factor-85” Post-Retirement BenefitsBenefits

Factor-85 Faculty Members qualify for the Factor-85 Faculty Members qualify for the following benefits on a 50/50 cost share following benefits on a 50/50 cost share basis until June 30basis until June 30thth following the attainment following the attainment of age 65:of age 65:

1.1. Health & Dental Coverage *Health & Dental Coverage *2.2. Group Life InsuranceGroup Life Insurance

* These would normally be paid 100% by the * These would normally be paid 100% by the retiree.retiree.

Retirement Allowance (Faculty)Retirement Allowance (Faculty)

UNB employees with 5 or more years of UNB employees with 5 or more years of continuous full-time service are eligible for a continuous full-time service are eligible for a retirement allowance payable the month after retirement allowance payable the month after they retire.they retire.

The retirement allowance is normally equivalent The retirement allowance is normally equivalent to 1 week’s (5 days’) pay for each year of to 1 week’s (5 days’) pay for each year of service up to a maximum of 25 weeks. It is service up to a maximum of 25 weeks. It is based on the annual salary at retirement.based on the annual salary at retirement.

Retirement Allowance (cont)Retirement Allowance (cont)

In the Memorandum of Understanding regarding the elimination of In the Memorandum of Understanding regarding the elimination of Mandatory Retirement, a special provision was included that Mandatory Retirement, a special provision was included that affects the amount of retirement allowance retirees will receive. affects the amount of retirement allowance retirees will receive.

If retirement occurs at a time later than the NRD, the retirement 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 allowance shall be decreased by 20% for each year until age 70 at which time the entitlement is zero.which time the entitlement is zero.

If an employee commits in writing to a specific retirement date on If an employee commits in writing to a specific retirement date on or before the NRD, the retiree will receive an additional amount or before the NRD, the retiree will receive an additional amount equal to 5% for each 6 months of retirement prior to the equal to 5% for each 6 months of retirement prior to the employee’s NRD. The maximum additional benefit that an retiree employee’s NRD. The maximum additional benefit that an retiree can receive is 30% of their retirement allowance. can receive is 30% of their retirement allowance.

Group Benefits for Post-65 Group Benefits for Post-65 Active EmployeesActive Employees

1.1. LTD terminates at December 31LTD terminates at December 31stst before NRD before NRD

2.2. Optional Benefits terminate at NRDOptional Benefits terminate at NRD

3.3. Group Life terminates at NRD but has a guaranteed Group Life terminates at NRD but has a guaranteed conversion option.conversion option.

4.4. Pension contributions and accrual continuePension contributions and accrual continue

5.5. Participation in the UNB Extended Health Plan continues but Participation in the UNB Extended Health Plan continues but is 100% employee paid.is 100% employee paid.

6.6. NB Prescription Drug Plan (100% ee paid)NB Prescription Drug Plan (100% ee paid)

7.7. NB Civil Service Retirees’ Dental Plan (100% ee paid)NB Civil Service Retirees’ Dental Plan (100% ee paid)

8.8. Healthcare Spending Account (100% UNB paid)Healthcare Spending Account (100% UNB paid)

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