BCTF Pensio

ns

BCTF Pensions

Report to the 2018 BCTF AGM

BCTF Pensio

ns

BCTF Pensio

nsPossible further pension

improvements

BCTF Pensions 2BCTF Pensio

ns

BCTF Pensio

nsTeachers’ Pension Plan

The New Plan changes

starting January 1, 2018,

represent modernization:

• increased lifetime

pension

• equity for members.

If sufficient surplus, further

improvements are

possible, but require the

following …BCTF Pensions 3BCTF Pen

sions

BCTF Pensio

ns• early signs of TPP surplus (June 2017)

• Plan Partners (BCTF and provincial government) decide on possible improvements (November 2017)

• size of surplus limits the improvements (December 2017)

• actuary indicates surplus to Plan Partners (January 2018)

• actuary confirms surplus with Financial Institutions Commissions (August 2018).

Surplus timeline

BCTF Pensions 4BCTF Pensio

ns

BCTF Pensio

nsIf surplus confirmed with

pension authorities…

The Joint Trust Agreement between Plan Partners applies these further improvements provided the member is “active on January 1, 2019”.

BCTF Pensions 5BCTF Pensio

ns

BCTF Pensio

nsIf surplus confirmed with

pension authorities… Example 1:

Jo Park taught high school physics for 28 years and is considering a last day at work on June 30, retiring July 1, 2018. Will Jo’s pension have any further improvements as a result of the pension surplus?

Answer: No. Jo’s pension = Old Plan + New Plan.

BCTF Pensions 6BCTF Pensio

ns

BCTF Pensio

nsIf surplus confirmed with

pension authorities… Example 2:

Leslie Jaen taught grades 5, 6, and 7 for 24 years and is considering a last day at work on December 31, retiring January 1, 2019. Will Leslie’s pension have any further improvements as a result of the pension surplus?

Answer: No. Leslie’s pension = Old Plan + New Plan.

BCTF Pensions 7BCTF Pensio

ns

BCTF Pensio

nsIf surplus confirmed with

pension authorities… Example 3:

Chadi Ulm taught French for 24 years and is considering a last day at work on January 30, retiring February 1, 2019. Will Chadi’s pension have any further improvements as a result of the pension surplus?

Answer: Yes. Chadi’s pension = Old Plan + New Plan with further improvements.

BCTF Pensions 8BCTF Pensio

ns

BCTF Pensio

ns

BCTF Pensions 9

Since further improvements are pending and may influence retirement decisions, Partners have made the decision that the BCTF inform all Plan Members.

BCTF Pensio

ns

BCTF Pensio

nsPossible further improvements –

summary table

TPP

features

Old Plan

prior 2018

Accrual rate

(yearly pension

build up rate)

1.51% of salary per year

• effectively due to a split

rate

Normal form

(default

calculation of

pension

payment)

Pension payment

calculated as a Single Life

Guaranteed Zero years

• Guarantee options:

- 5 years

- 10 years

- 15 years

Early-retirement

Reduction

Factor

The lesser of:

• 3%/yr for every year

under 60 or

• 3%/yr for every year your

age plus Contributory

Service is less than 90.

Bridge benefit TPP contributions pay for

this mini pension and the

basic lifetime pension.

Bridge is added to basic

lifetime pension from

retirement to age 65.

Pensionable

Service (PS)

35 years maximum

Long service

recognition

None

Highest

Average Salary

(HAS)

The average of your

highest five salaries

New Plan

starting 2018

1.85% of salary per year

• same accrual rate is applied

regardless of TTOC, part-time, or full-

time work.

Pension payment calculated as a

Single Life Guaranteed Zero years

form

• Guarantee options:

- 5 years

- 10 years

- 15 years

4.5% per year for every year under

age 61 at retirement

Any earned bridge still paid out from

retirement to 65. TPP contributions

originally paying for the Bridge is

instead added to build a larger basic

lifetime pension.

Limit removed

• every day worked builds pension

• employment restriction removed.

35 years of Contributory Service results

in an unreduced pension

• equity for TTOC, part-time,

maternity and parental leaves.

The average of your highest five

salaries

New Plan starting 2018

if sufficient surplus and

active Jan. 1, 2019

1.90% of salary per year

• same accrual rate is applied

regardless of TTOC, part-time, or full-

time work.

Pension payment calculated as a

Single Life Guaranteed Ten years

• Guarantee options:

- 15 years

- 0 years

- 5 years

4.5% per year for every year under

age 61 at retirement

Any earned bridge still paid out from

retirement to 65. TPP contributions

originally paying for the Bridge is

instead added to build a larger basic

lifetime pension.

Limit removed

• every day worked builds pension

• employment restriction removed.

35 years of Contributory Service results

in an unreduced pension

• equity for TTOC, part-time,

maternity and parental leaves.

The average of your highest five

salaries

Pluseither

or

BCTF Pensions 10BCTF Pensio

ns

BCTF Pensio

nsTPP

features

Old Plan

prior 2018

Accrual

rate

(yearly

pension

build up

rate)

1.51% of salary

per year

• effectively

due to a split

accrual rate.

Normal

form

(default

calculation

of pension

payment)

Pension

payment

calculated as

a Single Life

Guaranteed

Zero years

for all service

• guarantee

options:

- 0 years

- 5 years

- 10 years

- 15 years.

New Plan

starting 2018

1.85% of salary per year

• same accrual rate is

applied regardless of

TTOC, part-time, or

full-time work.

Pension

payment

calculated as

a Single Life

Guaranteed

Zero years

for all service

• guarantee

options:

- 0 years

- 5 years

- 10 years

- 15 years.

New Plan starting 2018

if sufficient surplus and

active Jan. 1, 2019

1.90% of salary per year• same accrual rate is

applied regardless of

TTOC, part-time, or full-

time work.

Pension

payment

calculated as

a Single Life

Guaranteed

Ten years for all service

• guarantee

options:

- 0 years

- 5 years

- 10 years

- 15 years.

Pluseither

orTPP

features

Old Plan

prior 2018

Accrual

rate

(yearly

pension

build up

rate)

1.51% of salary

per year

• effectively

due to a split

accrual rate.

Normal

form

(default

calculation

of pension

payment)

Pension

payment

calculated as

a Single Life

Guaranteed

Zero years

for all service

• guarantee

options:

- 0 years

- 5 years

- 10 years

- 15 years.

New Plan

starting 2018

1.85% of salary per year

• same accrual rate is

applied regardless of

TTOC, part-time, or

full-time work.

Pension

payment

calculated as

a Single Life

Guaranteed

Zero years

for all service

• guarantee

options:

- 0 years

- 5 years

- 10 years

- 15 years.

New Plan starting 2018

if sufficient surplus and

active Jan. 1, 2019

1.90% of salary per year• same accrual rate is

applied regardless of

TTOC, part-time, or full-

time work.

Pension

payment

calculated as

a Single Life

Guaranteed

Ten years for all service

• guarantee

options:

- 0 years

- 5 years

- 10 years

- 15 years.

BCTF Pensions 11BCTF Pensio

ns

BCTF Pensio

nsTPP features Old Plan

prior 2018

Inflation

Adjustment

Account

Funds the Cost

Of Living

Adjustments

for retirees.

New Plan

starting 2018

Funds the Cost Of Living

Adjustments for retirees.

New Plan starting 2018

if sufficient surplus and

active Jan. 1, 2019

Funds the Cost Of Living

Adjustments for retirees.Approximately 2% more

funding to this account.

Pluseither

orTPP features Old Plan

prior 2018

Inflation

Adjustment

Account

Funds the Cost

Of Living

Adjustments

for retirees.

New Plan

starting 2018

Funds the Cost Of Living

Adjustments for retirees.

New Plan starting 2018

if sufficient surplus and

active Jan. 1, 2019

Funds the Cost Of Living

Adjustments for retirees.Approximately 2% more

funding to this account.

BCTF Pensions 12BCTF Pensio

ns

BCTF Pensio

nsPossible further improvements –

scenariosScenario on June 30, 2018

Pension payment option July 1, 2018 ($/month)

July 1, 2019 ($/month)

Improvement to basic lifetime pension ($/month)

Hannah:

59 yo

32.6 yrs PS

HAS $79,200

100% Joint Life with spouse,

60. If Hannah dies first, 100%

of basic lifetime pension

goes to spouse until death.

$4,020

(includes

$1025 Bridge

until 65)

Then $2,996

starting 65.

$4,149

(includes

$1025 Bridge

until 65)

Then $3,124

starting 65.

Increase of $129

($27 due to

possible further improvements;

$102 due to

working an

extra year).

Stanie:

60 yo

25.6 yrs PS

HAS $79,200

Single Life Guaranteed 10

yrs. No spouse. If Stanie dies

within 10 yrs of retiring, 100%

of basic lifetime pension

goes to the beneficiary(ies)

until the end of 10 yr period.

$3,354

(includes

$1025 Bridge

until 65)

Then $2,996

starting 65.

$3,501

(includes

$1025 Bridge

until 65)

Then $2,996

starting 65.

Increase of $147

($24 due to

possible further improvements;

$123 due to

working an

extra year).

Scenario on June 30, 2018

Pension payment option July 1, 2018 ($/month)

July 1, 2019 ($/month)

Improvement to basic lifetime pension ($/month)

Hannah:

59 years old

32.6 yrs PS

HAS $79,200

100% Joint Life with spouse,

60. If Hannah dies first, 100%

of basic lifetime pension

goes to spouse until death.

$4,020

(includes

$1025 Bridge

until 65)

Then $2,995

starting 65.

$4,149

(includes

$1025 Bridge

until 65)

Then $3,124

starting 65.

Increase of $129

($27 due to

possible further improvements;

$102 due to

working an

extra year).

Stanie:

60 years old

25.6 yrs PS

HAS $79,200

Single Life Guaranteed 10

yrs. No spouse. If Stanie dies

within 10 yrs of retiring, 100%

of basic lifetime pension

goes to the beneficiary(ies)

until the end of 10 yr period.

$3,354

(includes

$1025 Bridge

until 65)

Then $2,553

starting 65.

$3,501

(includes

$1025 Bridge

until 65)

Then $2,700

starting 65.

Increase of $147

($24 due to

possible further improvements;

$123 due to

working an

extra year).

BCTF Pensions 13BCTF Pensio

ns

BCTF Pensio

nsPossible further improvements –

additional information

… a strong 2017 valuation will lead to

improvements coming to the Teachers’

Pension Plan. These improvements will be

positive for all plan members …

BCTF Pensions 14

”

“

BCTF Pensio

ns

BCTF Pensio

nsPension Information Outreach

sessions:

May 7

May 8

May 9

May 15

May 16

May 28

June 11

June 12

Victoria

Dawson Creek

Kelowna

Cranbrook

Prince George

Langley

Burnaby

Smithers

Details on BCTF pensions webpage

and will be sent to Local Presidents.

BCTF Pensions 15BCTF Pensio

ns

BCTF Pensio

nsThank you!

BCTF Pensions 16BCTF Pensio

ns