Pension Seminar for non-teaching pension plan members

1. Pension Seminarfor non-teaching pension plan members October 25, 2008 Centennial School Theatre Facilitated by Trudy Arndt-Harrison

2. Agenda

3. 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.

4. How to navigate the complexity of pension ?

5. Where do I start?

7. Introduction • About 1/3 of Canada’s 33 million people are born between 1946 and 1962. Canadians approaching retirement represent the fastest growing demographic in the country (Vancouver Sun). • Only 1/3 of the older workers are worried about whether they’ll have adequate income when they leave the workforce (Stats Canada). • The remaining 2/3 are under the delusion they’ll be “air-tight” upon retirement. • Demographics raise some concern: more seniors than ever (1 in 7 a senior in 2006; 50 years ago, 1 in 14 was a senior).

8. Introduction-cont’d SO…… • How much do you need to make a successful transition to retirement? Benchmark? • How much will you spend in retirement? • Do you need to set personal and financial goals before retirement? • Do you need to make a plan to achieve them?

9. What do I need to know?

11. General Pension plan background • Our Pension Plan is a defined benefit Pension Plan • Written contract by which the employer and workers are required to make monetary contributions in view of providing workers 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 % of your salary times the # of years of service • Our actuaries, AON Consulting, set the amount of the contributions that must be paid to the Plan based on the estimated cost of the benefits to be paid.

12. General pension plan background • The Plan began in May, 1955 and has been amended from time to time since then. The last amendment occurred in June 2008. • Most of the Plan Text is contained in the pamphlet found on the Pension website entitled “The Retirement Plan for Non-teaching Employees”. • Plan members include CUPE, Exempt staff and a majority of Teaching Speech Pathologists.

13. General pension plan background • If you joined the Plan after 1996, the following rules apply: • 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 must 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 a casual worker, you are eligible to join if you have completed two consecutive calendar years of employment and have received salary of 35% or more of the YMPE ($15,715 in 2008) in each of the two calendar years. If you choose not to join when you are first eligible, you can still join at the beginning of any subsequent period.

14. How is the plan administered?

15. What contributions can I make to the Plan?

16. How much do I contribute to the plan?

17. How much does the board contribute to the plan?

18. May I make additional voluntary contributions?

19. Contributions during a leave of absence

20. What happens to the contributions?

21. May I discontinue contributions?

22. Definitions you need to know

23. What is pensionable service?

24. What are pensionable earnings?

25. What is retirement service?

26. WHEN CAN I RETIRE ????

28. When can I retire on pension?

29. What $ would I receive (unreduced pension)?

30. What if I have less than 3 consecutive years of earnings?

31. What $ would I receive (reduced pension)?

32. What $ would I receive (reduced pension)?

33. What health benefits can I receive when I retire?

35. Pension payment options: what are they and what do they mean?

36. Pension payment options…cont’d

37. Do pension payment amounts change after pension commencement?

39. What happens to my pension if I die before retirement?

40. potential adjustments to pension benefit payments

41. Potential adjustments to pension plan payments…cont’d

42. Other pension-related items • Family Relations Act • www.qp.gov.bc.ca • Pension “vesting” • Vesting means you are eligible for pension and occurs after 2 years of Plan membership, or, if you were a plan member before 1998, after 5 years continuous employment • Disability Pension • Deferred Pension • Beneficiary designation

43. Other pension-related items—cont’d • Effects of Reciprocal Agreements • Plan is party to reciprocal arrangements with Public Sector Plans of BC (Muni, Teach, College, Public Service) • Importance of April 1, 2004 participant date

44. Other pension-related items—cont’d • Reciprocal Agreements..cont’d • On or after April 1, 2004, if you come from a participating employer or go to work for one, you can elect to transfer funds to this Plan or other one and have some or all of your service recognized. • On retirement, you would receive a single pension from the last Plan or a single one from our Plan.

45. Other pension-related items—cont’d • Reciprocal Agreements..cont’d • Before April 1, 2004, if you came from a reciprocal employer or went to work for one, no funds are transferred but you may apply to have earnings in both plans considered in average earnings and service in each plan recognized in the other for • Vesting • Eligibility for unreduced early retirement, death and disability benefits • No funds are transferred between Plans and on retirement, you would receive two separate pensions

46. I plan to retire soon…what are my next steps??

47. Before you Write your letter of retirement • Sit down with your spouse (if applicable) and figure out how much you will truly need each month to pay for basic amenities and support your future plans • Estimate your pension and other income, using the online Pension Calculator and/or generally calculate your pension amount using the info tools you have already been provided with

48. Before you Write your letter of retirement..cont’d • Review your Early Retirement options (if applicable) • Reductions in pension benefits • Eligibility for Long Term Service and Sick Leave payouts • Remember, Pensionable Service and Seniority are not the same for pension calculation purposes • Review your other sources of income • Other investments • CPP benefit eligibility

49. After you write your letter of retirement • Contact the HR department • Provide adequate notice • Generally, you might choose a retirement date close to the end of the month because • Pension benefits are paid for complete months only • Pensions are paid monthly via EFT on the first of the month • HR Department • Notifies both Payroll and Pension Department • Payroll estimates your earnings to retirement date and forwards info to Pension Department • Pension Department • Notes info & forwards same to AON Consulting

50. After you write your letter of retirement…cont’d • AON Consulting • Provides you with Retirement Benefit Statement which lists all your Pension Benefit options and forms to fill out to transact pension payments and health benefits • Refer to sample Statement excerpt • Your role • Once you review info from Aon, make pension benefit and health benefit choices, you return the completed forms to either Aon or Tanya in our Pension Department • REMINDER: once pension benefit choice made, it is irreversible • Our role • Once completed forms received, Tanya checks the forms for completeness and forwards info tor 3 Retirement Committee member for signature • Once signed by RC members, forms are forwarded to Payroll Department for processing • Payroll adds you onto the next monthly Pension Payroll (retroactive payments are also included in this first payment)