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SPRING 2019VOLUME 4ISBN 978-1-4605-1381-1
CONTACT USWRITE:NBTPP Board of Trustees c/o Vestcor PO Box 6000Fredericton, NB E3B 5H1
CALL: 1 800 561 4012 (toll free)or 506 453 2296 (Fredericton)
EMAIL: [email protected]
IN THIS ISSUE
1 | COST CERTIFICATE1 | NBTPPAT-A-GLANCE2 | INVESTMENT REPORT3 | LIFEEVENTS4 | POWER OF ATTORNEY5 | NBTPP MEMBER SURVEY6 | YOUR NBTPP BOARD OF TRUSTEES7 | AMENDMENTS TO
GOVERNINGDOCUMENTS7 | TIPS FOR RETIREES
NBTPP AT-A-GLANCEDo you feel like you could use a simplified documentto help walk you through the basics of the NBTPP?Goodnews!TheNBTPPAt-A-Glanceisthedocumentyou’relookingfor.
DesignedforthosewhoarenewtothePlan,orfor members who are looking for a refresheronhowthePlanworks, theAt-A-GlancegivesaquickbutthoroughoverviewofmanyofthemostimportantaspectsoftheNBTPP.
Wondering how much you contribute to thePlan? It’s in there! Curious as to how yourpensionbenefit iscalculated?It’s intheretoo!Wonderinghowtransitionsinyourlifecanaffectyour pension? The At-A-Glance covers that aswell!
You can find the NBTPP At-A-Glance by visiting www.vestcor.org/nbtppandlookingunder“Booklets”.
NBTPP UPDATE | 1
DISCLAIMER:ThisnewsletterisapublicationonbehalfoftheBoardofTrusteesoftheNewBrunswickTeachers’PensionPlan.ThispublicationisintendedtoprovideinformationabouttheNewBrunswickTeachers’PensionPlan.Ifthereisadiscrepancybetweentheinformationcontainedhereinandthepensionplantextorotherappropriategoverningdocuments,thelatterwillprevail.
COST CERTIFICATEThemostrecentActuarialValuationReportfortheNBTPPwascompletedasofAugust31,2016.AvaluationreportmustbecompletedeverythreeyearswiththenextonescheduledasofAugust31,2019.
IntheyearsinwhichanactuarialvaluationisnotpreparedbytheNBTPP,theactuarymustprepareaCostCertificate.InpreparingaCostCertificate,theactuarycalculatesthefinancialpositionoftheNBTPPbyusingtheactualassetvalueatAugust31andtheestimatedplanliabilitiesextrapolatedfromthedateofthelastcompletedactuarialvaluation.
FUNDING STATUS OF THE NBTPP
TheextrapolatedterminationvaluefundedratiooftheNBTPPbasedontheAugust31,2018CostCertificatewas108.5%.Thisratiocomparesthefairmarketvalueofthepensionplan’sassetswiththepensionplan’sextrapolatedfundingliabilityatAugust31,2018.
2 | NBTPP UPDATE
INVESTMENT REPORT
INVESTMENT RETURNS
Global financialmarkets ended an increasingly volatile and uncertain 2018with significant equitymarket declines inthelaterpartofthefourthquarter.DespitethisvolatilitythegrossinvestmentreturnfortheNBTPPfortheyearendedDecember31,2018wasapproximately2.05%,comparedtoitstotalfundbenchmarkreturnof0.94%.
Theinvestmentprogramsignificantlyexceededthepolicybenchmarkin2018,andledtoapositiveinvestmentreturninanenvironmentwheremanyotherpensionfundshadnegativeannualreturns1.
More importantly, both the longer term four-year annualized return of 6.24%, and the return since the inception ofVestcor’smanagementin1996of7.07%,remaininexcessofthe5.85%discountratesetbytheindependentactuary.
NOMINAL RETURN - ANNUALIZED FOR PERIODS > 1 YEAR Most global equity markets were negative in2018, although the U.S. market earned a 4%returnboostedbyforeignexchangegainsfromaweakeningCanadiandollar.Inaddition,positivecontributionsfromfixedincomeandalternativeassetsmore than offset equitymarket results.Theglobalgeopoliticaloutlook remainsmixed,withcontinuinguncertaintyastothelikelyformofresolutionsinBrexitnegotiations,U.S.-Chinatrade, and various political events around theglobecontinuingtoweighoninvestors.
The returnearned in excessof thebenchmarkportfoliocontributedpositivevalueaddat1.11%fortheyearendedDecember31,2018.
INVESTMENT ASSETSThe fair valueof theNBTPPassetsatDecember31,2018was$5.744billion,down$36million fromthe fair valueatDecember31,2017.ThedeclineinfundassetsasatDecember31,2018,isduetothesumofactivemembercontributionsandinvestmentreturnsbeingslightlylessthanthebenefitspaidouttoretireesthroughouttheyear.Thistypeofdifferencecanoccurovershort-termtimeperiodsandisrecoveredthroughstrongerlong-terminvestmentreturns.
Investmentassetmixweightswereheldclosetoinvestmentpolicytargetsduringtheyear.ThechartbelowoutlinestheportfolioassetmixatDecember31,2018.
Formoreinformation,pleasevisitwww.vestcor.org/marketupdates.
0%
2%
4%
6%
8%
10%
12%
2.05%
0.94%
6.24%
5.14%
7.07% 6.76%
One-Year Since Inception of Vestcor mandate
Four-Year
0% 5% 10% 15% 20% 25%
Short-Term Assets - 0.8%
Private Equity - 5.0%
Real Return Bonds - 5.0%
Absolute Return Strategies - 8.0%
Real Estate & Infrastructure - 10.2%
Canadian Equity - 6.9%
International Equity - 10.8%
Corporate Bonds - 15.6%
Government Bonds - 15.7%
Low Volatility Equity - 22.0%
Portfolio Return Benchmark Return
Fixed Income
Equities
Inflation Linked Assets
Absolute Return Strategies
1 RBC Investor & Treasury Services reports a Canadian defined benefit pension plan median annual return of -0.7% for the year ended December 31, 2018.
Value Added Return (Over Investment Policy Benchmark)
NBTPP UPDATE | 3
LIFE EVENTS Doyoueverwonderhowyourpensionwillbeaffectedbytimesoftransitioninyourlife?Vestcorhaslaunchedanewsectionoftheirwebsitetohelpyoueasilyfindtheinformationyouneedrelatingtoyourpensionduringthesetransitionalperiods.
ThisnewportionofthesiteiscalledLifeEvents,andyoucannavigatethroughitbasedonwhatstageofyourlifeyouarein.It’sdividedintothefollowingsections:
• Welcome to the Plan • Returning from a Leave of Absence • Ending a Spousal Relationship• Leaving your Employment
Visitwww.vestcor.org/lifeeventstodaytoexperienceitforyourself.
• Planning for Retirement • Welcome to Retirement • Death of a Member
Power of Attorney
4 | NBTPP UPDATE
POWER OF ATTORNEYWHAT IS A POWER OF ATTORNEY?
APowerofAttorney(POA)isalegaldocumentthatyousigntogiveoneormorepeopletheauthoritytomanageyourpersonalaffairsonyourbehalf.InmostofCanada,thepersonyounameiscalledan attorney(pleasenotethatthispersondoesnotneedtobealawyer).
WHY NAME AN ATTORNEY?
Developingordealingwithanillnessordisabilitycanbedifficultforyouandyourfamily.Tominimizeanyrisksassociatedwithhowyouraffairsaremanaged(includingyourpensionorhealthcareneeds)shouldyouunfortunatelybecomeillordisabledandnolongerabletomanageyouraffairs,youmaywanttoconsidernaminganattorneyunderaPOA.WithaPOA,youcanchooseaheadoftimewhowillmanageyourpersonalaffairsiftheneedarises.WithoutaPOA,someonewillbeappointedforyoubythecourts,anditmaynotbethepersonyouwouldchooseforyourself.
Ifyou’rearetiredmember,havingtodependonanattorneytomanageyouraffairswillnotimpacttheamountofyourpension.YourattorneywillsimplybeabletoprovideinformationtoVestcoronyourbehalfsuchasachangeofaddressorchangeofbankaccounts.
Yourpersonal circumstances canaffectwhoyou select tobeyourattorney,and thepowersyouchoose togrant thatperson.ThelegalrequirementsforavalidPOAmayvaryfromjurisdictiontojurisdiction,soitisrecommendedtoseeklegalandestateplanningadvice.ItisalsoimportanttoreviewyourPOAfromtime-to-timetoensureitmeetsyourneeds.
ACTING UNDER A POWER OF ATTORNEY
IfauthorizedtodosounderthePOA,thepersonyounamewillbeabletocommunicatewithourMemberServicesteamto requestgeneralor specific informationconcerningyourpensionand/orbenefits. If yougrant someoneaPowerofAttorney,youshouldprovidethatpersonwith:
• an original, notarized or a certified true copy of the POA bearing the original signature of the lawyer, notary,commissionerofoathsorjusticeofthepeace;and
• contactinformationforVestcor.
NBTPP MEMBER SURVEYLastFall,theBoardlaunchedasurveywiththeintentionofbetterunderstandinghowyou,asamemberoftheNBTPP,perceiveyourpensionplan.Wewishtothankallmemberswhotookthetimetorespondtothesurvey.Yourresponseswillhelpguideusmovingforward.Belowisanoverviewofyourresponses.
NBTPP UPDATE | 5
INDEXING ADJUSTMENT BENEFIT (IAB)
When asked if aware thatan IAB was provided to allmembers last year, 68% ofmembers responded thattheywere.
Did you know that an IAB positively impacts the pension benefits of allmembers, whether they areactive, deferred, or retired?Refer to the Fall 2018newsletter to find out moreabout the most recent IABprovided.
YES68%
NO32%
2%DID NOT
CONFIRM
1%WERE
INACTIVE
GOVERNANCE
8 out of 10 members believe that theirBoard of Trustees has the expertise tomanagethePlaneffectivelyandprudently.Find out more about your Board’sexperienceandexpertisebyreadingtheirbiographies and board accomplishmentsatwww.vestcor.org/nbtpp.
ONLY 1 IN 2 MEMBERS FEEL THEY HAVE A SOMEWHAT OR VERY GOOD UNDERSTANDING OF THE PLAN.
HaveyouvisitedthenewNBTPPwebsite?VESTCOR.ORG/NBTPPFindyourmemberbooklet,applicationforms,pensionestimatecalculator,governingdocuments,financialresultsandmuchmore.Learnaboutyourpensionplantoday!
4,600+ MEMBERS
RESPONDED33%WERE
ACTIVE
61%WERE
RETIRED
78% OF MEMBERS FEEL WELL REPRESENTED BY THEIR BOARD
OF TRUSTEES
3%WERE
SURVIVORS
6 | NBTPP UPDATE
YOUR NBTPP BOARD OF TRUSTEESBasedonfeedbackthatwereceivedfromtheMemberSurvey,weknowthatmanyofyouareunfamiliarwiththepeoplewhoserveyouontheNBTPPBoardofTrustees.Withthisinmind,wewanttoprovideyouwithaquickbackgroundonthemembersofyourBoard.
Asyoucan see, yourBoardmembershaveverydiversebackgrounds,providinga strongboardcomposition. It is alsoimportanttonotethatwhileeachmemberhasbeennominatedtotheBoardbytheprovincialgovernmentortheNBTF,theymustalwaysactinthebestinterestofthePlanandallitsmemberswhenadministeringtheaffairsofthePlan.Fullbiographiescanbefoundatwww.vestcor.org/nbtppunder“PlanGovernance”.
LARRY JAMIESON (CHAIR)Larry Jamieson is the Executive Director of the NewBrunswickTeachers’Association.Hetaughtandworkedinmiddleschoolsandhighschoolsfor21years;thelast12oftheseasPrincipalofHarveyHighSchool.
DAVID NOWLAN, CPA, CA (VICE-CHAIR)David Nowlan is Assistant Comptroller, Accounting,ReportingandFinancialSystems,DepartmentofFinanceandTreasuryBoard.Hehasheldnumerouspositionsinthepublicandprivatesphere,includingDirectorofAuditandConsultingServicesandActingComptroller.
JENNIFER MORRISON, CPA, CA (TRUSTEE)Jennifer Morrison is currently the Treasurer at theUniversity of New Brunswick. Prior to joining theUniversity, Jennifer held the role of Director of TrustFund Administration with the Treasury Division of theDepartmentofFinance.
RENO THÉRIAULT (TRUSTEE)RenoThériaultworkedineducationfor18yearsbeforebecoming President of the AEFNB (1987-89). He thenserved the Association as a Professional DevelopmentOfficerandExecutiveDirector(andPensionAdvisor)untilretirementin2005.From2006to2016,heservedontheBoard of Directors of the New Brunswick InvestmentManagementCorporation.
MIKE SPRINGER (TRUSTEE)Mike Springer retired as Director of Teacher WelfareServicesat theNewBrunswickTeachers’Association in2002.AfterretirementfromtheNBTA,heworkedseveralyearsintheinvestmentfield.
JANE GARBUTT (TRUSTEE)JaneGarbutt isVice-PresidentofCorporateOperationsandAdministrationatOceanCapital, inSaintJohn.ShealsoservedindeputyministerialrolesatFinance,HumanResourcesandGovernmentServices.
LEONARD LEE-WHITE (TRUSTEE)Leonard Lee-White is the Assistant DeputyMinister oftheDepartmentofFinanceandTreasuryBoard,andhasextensiveexperienceinprovidingpensionplaninvestingandriskmanagementadvicetogovernmentandboardsoftrustees.HeisaformerVice-PresidentwiththeNewBrunswickInvestmentManagementCorporation.
MARCEL LAROCQUE (TRUSTEE)Marcel Larocque is Deputy Executive Director ofthe Association des enseignantes et enseignantsfrancophones du Nouveau-Brunswick. He served asPresident of the association from 2007 to 2009 and,before that, was a Teacher, Vice-Principal and thenPrincipalatÉcoleMarie-Esther.
BOB FITZPATRICK (OBSERVER)BobFitzpatricktaughtforeighteenyearsintheMiramichiarea.HewasPresidentoftheNewBrunswickTeachers’Associationfor twoyearsand laterservedasExecutiveDirectoroftheassociationfor16years.
KERRY LEOPKEY (OBSERVER)Kerry Leopkey is currently the Executive Director andChief Spokesperson for the New Brunswick Teachers’Federation.HehasheldavarietyofpositionsintheareaofHumanResourcesandLabourRelationsoverthepast25yearsinboththeprivateandpublicsectors.
NBTPP UPDATE | 7
TIPS FOR RETIREES
UPDATING YOUR INFORMATION
• Isamoveinyournearfuture?YoucanupdateyouraddresswithVestcorusingtheirchangeofaddressformavailableatwww.vestcor.org/address.Ifyouwouldrathercall,youcanalsocontactthemat18005614012.
• Ifyouhaveowedmoneyafterfilingyourincometaxreturninthepastfewyears,youmaywanttoconsiderincreasingtheamountoftaxwithheldfromyourmonthlypensionpayment.Bydoingso,youcanreducehowmuchmoneyyouowewhenyoufileyourtaxreturnnextyear.Theformisavailableatwww.vestcor.org/incometax.
• Haveyouopenedanewbankaccount?Gotowww.vestcor.org/bankingtofindtheformyouneedtoupdateyourbankinginformationwithVestcor.YoucanalsocontactVestcorbyphoneat18005614012.Remembertokeepyouroldaccountopenuntilyou’veseenapaymentdepositedinyournewaccount.
AMENDMENTS TO GOVERNING DOCUMENTSTheNew Brunswick Pension Benefits ActrequiresthatPlanmembersbeprovidedwithanupdateonanyPlanamendments.Assuch,theBoardofTrusteeswouldliketoinformyouthatthePlanTextwasamendedinordertodocumenttheIndexingAdjustmentBenefit(IAB)awardedasofJanuary1,2019.TheamendmentwasfiledwiththeSuperintendentofPensionsonJanuary24,2019.