BCTF Pensio
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BCTF Pensions
Report to the 2018 BCTF AGM
BCTF Pensio
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BCTF Pensio
nsPossible further pension
improvements
BCTF Pensions 2BCTF Pensio
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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
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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
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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
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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
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BCTF Pensio
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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
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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
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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
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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
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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
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BCTF Pensio
nsThank you!
BCTF Pensions 16BCTF Pensio
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