[PPT] - . . . ready? e P - F T C B s n o i s n e P BCTF PowerPoint Presentation

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. . . ready?

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BCTF Pensions

Pension Information Outreach 2018

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Agenda

1. How the Old Plan works.
2. How the New Plan works.
3. Possible further improvements

to the New Plan.

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Building your pension is like a coin, with two sides

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Building your pension is like a coin, with two sides

Pension build up rate for every year of service. Reduction rate for every year retiring earlier than 65.

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Building your pension is like a coin, with two sides

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Pension reduced by the lessor of:

3% per year

under 60 or

3% per year

that age + Contributory Service* is less than 90. Pension builds at 1.51% per year of service. Pension builds at 1.85% per year of service. Pension reduced by 4.5% for every year under age 61.

*Contributory Service is measured as any month you have had any service in the TPP

Old Plan New Plan

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Building your pension is like a coin, with two sides

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Your pension may be built up this way:

Pension made of mostly Old Plan and a little of the New Plan; soon to retire member. Pension made of half the service in the Old Plan and half the service in the New Plan; mid career member. Pension made of little Old Plan and a mostly of the New Plan; beginning member.

+ + +

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Retirement income

90 85 80 75 70 65 60 55

Earliest retirement TPP Bridge amount TPP Lifetime amount Canada Pension Plan

Summary

Old Age Security Canada Pension Plan Canada Pension Plan

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Possible further pension improvements

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Teachers’ 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 …

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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

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If 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”.

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If 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.

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If 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.

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If 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.

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

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Possible 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

riginally 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

riginally 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

plus

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TPP 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 (1.3%/2.0%). Normal form (default calculation

f pension

payment) Pension payment calculated as a Single Life Guaranteed Zero years for all service

guarantee
ptions:
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
ptions:
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
ptions:
0 years
5 years
10 years
15 years.

plus

r

TPP 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 (1.3%/2.0%). Normal form (default calculation

f pension

payment) Pension payment calculated as a Single Life Guaranteed Zero years for all service

guarantee
ptions:
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
ptions:
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
ptions:
0 years
5 years
10 years
15 years.

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Pension payment options —sample pension estimate

BCTF Pensions 18 Basic Pension Bridge Benefit Temp Annuity Total to 65 Total after 65 Survivor’s pension Single life options 0 year guarantee (no guarantee) $2,426 $815 $3,241 $2,426 5 year guarantee $2,421 $815 $3,236 $2,421 10 year guarantee $2,407 $815 $3,222 $2,407 15 year guarantee $2,383 $815 $3,198 $2,383 10 year guarantee + temporary annuity $2,310 $815 $580 $3,705 $2,310 Joint life options 100% Joint life $2,238 $815 $3,053 $2,238 $2,238 100% Joint life + temporary annuity $2,148 $815 $580 $3,543 $2,148 $2,148 80% Joint life guaranteed 10 years $2,269 $815 $3,084 $2,269 $1,815 80% Joint life guaranteed 15 years $2,263 $815 $3,078 $2,263 $1,810 60% Joint life guaranteed 10 years $2,301 $815 $3,116 $2,201 $1,380 60% Joint life guaranteed 15 years $2,290 $815 $3,105 $2,290 $1,374 40% Joint life guaranteed 10 years $2,334 $815 $3,149 $2,334 $ 933 tpp.pensionsbc.ca my account

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Possible further improvements — summary table continued…

TPP features Old Plan prior 2018 Early- retirement Reduction Factor The lesser of:

3%/yr for every

year under 60

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3%/yr for every

year your age + Contributory Service is less than 90. Bridge benefit TPP deductions pay for this mini pension and the basic lifetime

pension. Bridge

is added to basic lifetime pension from retirement to age 65. New Plan starting 2018 4.5% per year for every year under age 61. Any earned Bridge still paid out from retirement to 65. TPP deductions originally paying for the Bridge is instead added to build a larger basic lifetime pension. New Plan starting 2018 if sufficient surplus and active Jan. 1, 2019 4.5% per year for every year under age 61. Any earned Bridge still paid out from retirement to 65. TPP deductions originally paying for the Bridge is instead added to build a larger basic lifetime pension.

plus

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TPP features Old Plan prior 2018 Early- retirement Reduction Factor The lesser of:

3%/yr for every

year under 60

r
3%/yr for every

year your age + Contributory Service is less than 90. Bridge benefit TPP deductions pay for this mini pension and the basic lifetime

pension. Bridge

is added to basic lifetime pension from retirement to age 65. New Plan starting 2018 4.5% per year for every year under age 61. Any earned Bridge still paid out from retirement to 65. TPP deductions originally paying for the Bridge is instead added to build a larger basic lifetime pension. New Plan starting 2018 if sufficient surplus and active Jan. 1, 2019 4.5% per year for every year under age 61. Any earned Bridge still paid out from retirement to 65. TPP deductions originally paying for the Bridge is instead added to build a larger basic lifetime pension.

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TPP features Old Plan prior 2018 Pensionable Service (PS) 35 years maximum. Long service recognition None. Highest Average Salary (HAS) The average

f your highest

five salaries. Inflation Adjustment Account Funds the Cost Of Living Adjustments for retirees. New Plan starting 2018 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

f your highest

five salaries. Funds the Cost Of Living Adjustments for retirees. New Plan starting 2018 if sufficient surplus and active Jan. 1, 2019 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

f your highest

five salaries. Funds the Cost Of Living Adjustments for retirees. Approximately 2% more funding to this account.

plus

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TPP features Old Plan prior 2018 Pensionable Service (PS) 35 years maximum. Long service recognition None. Highest Average Salary (HAS) The average

f your highest

five salaries. Inflation Adjustment Account Funds the Cost Of Living Adjustments for retirees. New Plan starting 2018 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

f your highest

five salaries. Funds the Cost Of Living Adjustments for retirees. New Plan starting 2018 if sufficient surplus and active Jan. 1, 2019 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

f your highest

five salaries. Funds the Cost Of Living Adjustments for retirees. Approximately 2% more funding to this account.

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Possible further improvements —pension amounts

Member profile Old Plan to December 31, 2017 New Plan starts January 1, 2018 Pension up to 65 Pension starting at 65

26 years

Typical retiree: 60 years old PS: 26 years HAS: $80,000

24 years 2

$3,100 $3,100 $3,440 $2,670

18 years 8

$3,340 $2,770

13 years 13 years

$3,260 $2,850

further improvements

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Possible further improvements —scenarios

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%
f 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%

f basic lifetime pension

goes to the beneficiary(ies) until the end of 10 yr period. $3,354 (includes $801 Bridge until 65) Then $2,553 starting 65. $3,501 (includes $801 Bridge until 65) Then $2,700 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%
f 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%

f basic lifetime pension

goes to the beneficiary(ies) until the end of 10 yr period. $3,354 (includes $801 Bridge until 65) Then $2,553 starting 65. $3,501 (includes $801 Bridge until 65) Then $2,700 starting 65. Increase of $147 ($24 due to possible further improvements; $123 due to working an extra year).

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Possible 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 …

tpp.pensionsbc.ca

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Pension Information Outreach sessions 2018:

May 7 May 8 May 15 May 16 May 23 May 28 June 11 June 12 Victoria Dawson Creek Cranbrook Prince George Kelowna Langley Burnaby Smithers bctf.ca For Teachers Pensions

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Thank you!

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