University of Windsor New Faculty Orientation 2006

1. University of Windsor New Faculty Orientation 2006 Welcome ! Monday, July 10, 2006

2. Overview • Types of Pension Plans • Faculty Pension Plan • Life as an Active Member • Joining the Pension Plan • Retirement • Survivor Options • Terminating Membership • Past Service Pension Adjustments • Monthly Pension Indexing • Overview of Health, Dental, Life and additional benefits

3. Types of Pension Plans • Defined Benefit Plans (DB) • Benefit is defined by a formula • Pension at retirement is always known • Most often the employer assumes the investment risks / rewards • Defined Contribution Plans (DC) • Contributions are defined by a formula • Pension at retirement is unknown • Most often the employee assumes the investment risks / rewards • Hybrid Plan – a combination of DB and DC • Attempts to provide the best of both worlds

4. Faculty Pension Plan • Hybrid Pension – Two Components • Money Purchase (MPP) (Defined Contribution) AND • Minimum Guarantee (MGP) (Defined Benefit)

5. Faculty Pension Plan • Money Purchase (Defined Contribution) • 6% Member Contribution PLUS 6% University Contribution credited to individual member accounts along with fund rate of return • Money Purchase Pension (MPP), payable monthly at retirement • MPP = Total MPC Account at Retirement Actuarial Annuity Factor • Actuarial assumptions include mortality, retirement age, and spousal age.

6. Faculty Pension Plan • Minimum Guarantee (Defined Benefit) • 1.5% of Best Average Earnings (BAE) up to Final Average YMPE (FYMPE) PLUS • 2 % of BAE above FYMPE Multiplied by • Years (and part years) of Pensionable Service in the plan

7. Plan Definitions • BAE = 12 X average of Members monthly earnings in the 48 months of highest earnings, (not necessarily consecutive) prior to retirement. • Earnings = Member’s basic nominal salary, excludes overload, allowances, bonuses or stipends, intersessions, etc. • YMPE = Year’s Maximum Pensionable Earnings in effect under the Canada Pension Plan. • (2006 = $42,100) (2005 = $41,100) (2004 = $40,500) (2003 = $39,900) • FYMPE = Average of YMPE during same period used to determine your BAE.

8. Life as an Active Member • Contributions – 6% of nominal salary, with matching University contribution, subject to CCRA contribution limits. This includes nominal salary paid in the form of a Research Grant. Special rules for certain types of leaves such as sabbaticals, education leaves. • Once an enrolled active member you may not opt out. • Pensionable earnings, service and contributions captured monthly • Immediate Vesting – ownership of pension benefits • Pension Adjustment – T4 - deemed value of one year plan participation – reduces personal RRSP room • Annual Pension Statement – within 6 months of plan year end • Plan Year runs from July 1st to June 30th of each year

9. Faculty Pension Plan – Joining the Plan • Full Time, Permanent Faculty Compulsory membership coincident with or next following Employment Date. • Limited Term Appointments Voluntary participation coincident with or next following Employment Date. • Sessional Instructors and Part Time Employees Voluntary participation coincident with or next following the completion of 24 months of Continuous Service provided you have: (1) earned at least 35% of the CPP Year’s Maximum Pensionable Earnings or (2) worked at least 700 hours in each of the two (2) immediately preceding calendar years.

10. Faculty Pension Plan – Retirement Normal Retirement Date - July 1st following the last day of the contract year in which the member attains age 65 - minimum age 65 to receive an unreduced pension • Faculty hired after September 1, 1970 retire on the June 30th following the 65th birthday • Faculty hired prior to September 1, 1970 retire on the August 31st following the 65th birthday • Article 47:04 of the Collective Agreement Early Retirement Date - anytime after age 55 - MPP pension is account balance annuity - MGP subject to actuarial reduction - subject to University approval

11. Example of Annual Pension Payable • Date of retirement = September 1, 206 • Pensionable Service = 35 years • Best average earnings = $90,000 • Final average YMPE = $40,900 • MPC Account Balance = $500,000 • Actuarial annuity factor = 10.2203 • MPP = $500,000/10.2203 = $48,922.24 per year • MGP = [35] x [0.015 x $40,900 + 0.02 x ($90,000 - $40,900)] = $55,842.50 per year • Basic Benefit payable at retirement = $55,842.50 per year

12. Faculty Pension Plan – Survivor Options • Death while active – Greater of MPP account or MGP value • Lump sum or Spousal Monthly Pension • Death after Retirement – based on option chosen at retirement • If single at retirement or with spousal waiver • Life Only, Life 5, 10 or 15 • If legal spouse at retirement or no spousal waiver on file • Joint and Survivor 60, 66 2/3(Guar 5), 75 or 100% • Basic pension reduced 10% to 20% to provide spousal benefit • Spouse and member can waive 60% option • In ALL cases, options are permanent on 1st date of retirement

13. Faculty Pension Plan – Terminating before Retirement • Termination Benefit is the Greater of: • Money Purchase Component Account balance to-date • Commuted value of Minimum Guaranteed Pension earned to-date • Transfer Options: • Transfer termination benefit to a locked-in vehicle if employed > 24 months • Transfer termination benefit to a non locked-in vehicle if employed < 24 months • Leave benefit in plan for deferred pension at a future retirement date • Transfer to a new employer, if allowed • At Retirement - In Lieu of Pension, Members MAY transfer entitlements from plan • Considered a termination, not a retirement • Forfeit Minimum Guarantee Pension, lifetime pension indexing rights • Higher investment fees, potentially greater investment risk to member • Forfeit rights to Benefits, Tuition Remission, H.K. memberships etc. • Forfeit future Surplus sharing

14. Past Service Pension Adjustments • What are they? • Adjustments most often created by retroactive pension plan improvements • Example: MGP formula change from 1.45% / 2% to 1.5% / 2% • University must calculate value of retroactive improvement and report this to Canada Customs and Revenue Agency (T215) • Further reduces personal RRSP room and sometimes forces RRSP withdrawals

15. Faculty Pension Plan – Indexing Monthly Pension • Both the MPP and MGP adjusted every July 1 • MPP adjusted by the fund rate of return in excess of 6% and an additional adjustment for mortality experience – can increase or decrease • MGP increase based on the increase in the Consumer Price Index • After the MPP and MGP have been adjusted (plus or minus), we compare the two, the larger amount becomes the new pension payable starting at July 1st • Indexing rights passes to those with a Survivor pension

16. Faculty Plan – Health Insurance Overview • Benefits are effective with your date of employment. • Green Shield provides single or family coverage. • Coverage includes: • Drugs • Semi-private hospitalization • Extended health services • Out of Province/Country coverage – referral / emergency • Vision • Audio • Health benefit premiums are paid by the University • Subject to $10 Single / $20 Family annual deductible Web based subscriber online access – www.greenshield.ca

17. Faculty Plan – Dental Insurance Overview • Benefits are effective with your date of employment. • Green Shield provides single or family coverage. • Coverage includes: • 80% coverage for Basic & Comprehensive Services • 80% coverage for Major Restorative Services • 50% for Orthodontic Services - $3,000 individual lifetime maximum • Basic services cover recalls once every 9 months • Dental services may be subject to limitations • Dental benefit premiums are paid by the University

18. Faculty Plan – Group Insurance Overview • Benefits are effective with your date of employment. • Short Term Disability program (Employer Insured) • Provides 105 days fully paid • Long Term Disability insured by Great West Life • Provides pro-rated benefit to a maximum of $10,000 monthly, indexed • LTD premium is Employee paid – LTD benefit is Non Taxable • Basic Life Insurance (Sun Life) A.D.&D. (Chubb) • Insurance benefit of three (3) times annual salary, rounded to the next highest $1,000 – to a maximum of $350,000 • University paid Premiums • Optional Dependent Life and A.D.&D. available • Employee paid Premiums

19. Faculty Plan – Additional Faculty Benefits • Benefits are effective with your date of employment. • Tuition Remission (taxable benefit) • Full Time Faculty , their dependents and spouse eligible for free tuition. • Sessional Instructors entitled to one tuition credit course per year in a year the Instructor teaches one (1) or more courses. • Some limitations apply to this benefit. Contact Human Resources. • St. Denis Centre – Fitness Facility (non taxable benefit) • Full Time Faculty, their dependents and spouse entitled to basic membership. • Sessional Instructors are provided with membership during the semesters in which they are teaching. • Some limitations apply to this benefit. Does not include access to the Forge. Contact the St. Denis Centre for more information.

20. Office of Pensions, Benefits and HR Systems Department of Human Resources – 2nd floor Chrysler Hall Tower • Rita LaCivita – Executive Director of Human Resources - ext. 5007 • Cheryl Paglione – Associate Director of Human Resources - Pensions, Benefits and HR Systems - ext. 2014 • Tom Puskas – Manager of Pensions, Benefits and HR Systems – ext. 2048 • Melissa Simas – Pension, Benefits and Records Administrator – Faculty, Librarians, Ancillary Academic Staff – ext. 2090 Visit our website at www.uwindsor.ca/hr Faculty Association Pension & Benefits

21. Faculty Orientation – Pensions and Benefits Thank You! Questions?