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PENSION SEMINARFOR NON-TEACHING PENSION PLAN MEMBERS

April 20, 2013

Presented by Betty Bolton

Retiree Representative for Retirement Committee

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AGENDA

INTRODUCTION

• Betty Bolton, • Retirement Committee Members• Ifigenia Fasogiannis, Citizen Services Specialist, Service Canada

OVERVIEW

• Nonteaching Pension Plan --background, payment and benefit options, other retirement considerations

PENSION

CALCULATOR & WEBS

ITE

• How to access and use the Pension Plan website and Pension Plan Calculator• Estimating pension payments and assessing benefit options• Gathering information to make better informed choices

CPP &

OAS

• As Canadians, what we can expect to receive• Planning for Early Retirement

CLOSING REMARKS

• FAQ’s, other questions and comments

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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.

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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).

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INTRODUCTION CONTD.

Committee Members:For the Board: For the Union:Michelle Daycock Tom MacDonaldGail Dowler Stan MarshallChris Nicolls Bruce RichardsonKimberley Wakil Irene Schoemaker

For the RetireesBetty Bolton

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INTRODUCTION CONTD.

Professional Organizations

- Aon Hewitt- RBC Dexia- Barkman and Tanaka- Lawson Lundell and Lawson- Investment Companies Aberdeen – global equities Fidelity Investments Pyramis Trusts – Canadian equities and bonds

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What do I need to know?

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GENERAL PENSION PLAN BACKGROUND

Our Pension Plan is a defined benefit Pension Plan Written contract by which the employer and employees

are required to make monetary contributions with a view to provide employees 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 percentage

times the years of pensionable service times the average of the highest three consecutive years’ earnings.

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GENERAL PENSION PLAN BACKGROUND

The Plan began in May, 1955 and has been amended from time to time since then. The Plan Text was re-written, almost in its entirety, in 1996 to conform to the Pension Benefits Standards Act (British Columbia) and the Income Tax Act (Canada). As a result, you will find references to post December 31, 1996 and pre January 1, 1997 throughout the Plan Text. The last amendment occurred in January, 2011.

A summary of the Plan Text is contained in the pamphlet found on the Pension website entitled “The Retirement Plan for Non-teaching Employees”.

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GENERAL PENSION PLAN BACKGROUND Effective January 1, 1987, participation in the Plan

became compulsory for all new employees:

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 of January 1, 1998, as a casual worker or part time employee, you became eligible to join if you have completed two consecutive calendar years of employment and have received salary of 35% or more of the YMPE ($16,905 in 2011) 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.

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What contributions can I make to the Plan?

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HOW MUCH DO I CONTRIBUTE TO THE PLAN?

Employee required contributions to the Plan are:

- 4.9% of annual earnings up to the YMPE- 6.6% of annual earnings over the YMPE

In 2013 the YMPE (years’ maximum pensionable earnings under Canada Pension) is $51,100

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HOW MUCH DOES THE BOARD CONTRIBUTE TO THE PLAN?

The most recent complete valuation is as of December 31, 2011. This valuation requires that the Board contributes at a rate of 9.13% of covered payroll which includes:

7.93% for benefits earned in the year by members

1.2% administration allowance The Board also pays 50% of the cost of

retiree health benefits

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MAY I MAKE ADDITIONAL VOLUNTARY CONTRIBUTIONS?

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CONTRIBUTIONS DURING A LEAVE OF ABSENCE

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MAY I DISCONTINUE CONTRIBUTIONS?

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Definitions you need to know

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PENSIONABLE SERVICE & EARNINGS

Pensionable service is a measure of the time you have been contributing to the Plan and does not necessarily have a direct relationship to your length of service with the Board nor with your seniority.

Pensionable earnings are the earnings on which your contributions and pension are based.

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PENSIONABLE SERVICE & EARNINGS – CONTD.

Pre-January 1, 1997

Each calendar year of participation in the Plan was considered as a year of pensionable service. This generally included leaves of absence.

Your pensionable earnings for this period are your T4 earnings, excluding taxable benefits and allowances.

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PENSIONABLE SERVICE & EARNINGS – CONTD. Post December 31, 1996

1500 or more hours in a calendar year counts as one year of pensionable service and your pensionable earnings are your T4 earnings, excluding taxable benefits and allowances, and lump sum payouts when leaving the Board.

Less than 1500 hoursPensionable service is calculated as a percentage of 1500 hours, but your pensionable earnings are grossed up by that same percentage, so your pensionable earnings would be as if you worked 1500 hours.

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WHEN CAN I RETIRE

????

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WHEN CAN I RETIRE ON PENSION?

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WHAT $ WOULD I RECEIVE (UNREDUCED PENSION)?

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WHAT $ WOULD I RECEIVE (REDUCED PENSION)?

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WHAT $ WOULD I RECEIVE (REDUCED PENSION)?

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PENSION PAYMENT OPTIONS: WHAT ARE THEY AND WHAT DO THEY MEAN?

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PENSION PAYMENT OPTIONS…CONT’D

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DO PENSION PAYMENT AMOUNTS CHANGE AFTER PENSION COMMENCEMENT?

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HEALTH BENEFITS

Currently a retiree may elect coverage under the basic Medical Services Plan of B.C., as well as extended health and dental plans in B.C. Half the premiums are paid by deduction from the retiree’s monthly pension cheque; the other half is paid by the Board.

Effective July 1, 2002, Plan members retiring can elect to take benefit coverage only at time of retirement or upon involuntary loss of coverage at a later time.

Current premium rates are on page 8 of your worksheets.

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RECIPROCAL SERVICE

Effects of Reciprocal Agreements

The Plan is party to reciprocal arrangements with Public Sector Plans of B.C. (Municipal, Teaching, College, Public Service)

Importance of April 1, 2004 date to participants.

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BEFORE YOU WRITE THAT LETTER!

Monthly Expenses – be realistic

Projected monthly income – pension (calculator @ SD43/Resources/Pension/Links), CPP, OAS, other

Reduction in pension benefit?

Long term service payouts – seniority?

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IT’S A GO!!!

Write the letter to Human Resources!

Make sure you give adequate notice!

Generally, it is recommended that your retirement date is close to the end of the month because:- pensions are only paid for complete months|- pensions are deposited in your bank account on the 1st of the month

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WHAT HAPPENS NEXT – PENSION?

Aon Hewitt completes all calculations You will receive an information package from

Aon Hewitt showing:Option A – spousal benefit with 60% to survivorOption B – spousal benefit with 75% to survivorOption C – spousal benefit with 100% to survivorOption D – single lifeAll with no guarantee, 5 year guarantee or 10 year guaranteeAll options are further broken down into pre-January 1, 1997 and post-December 31, 1996Choose wisely – there is no going back!

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FORMS TO BE SIGNED RE PENSION

Pension Option form Bank deposit form TD1 Income Tax forms Acceptance or declining of health benefits

form Medical Services Plan application Extended Health and Dental Benefits form

Return completed forms either directly to Aon Hewitt or via the Board Office.

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BENEFITS ON LEAVING SERVICE OF THE BOARD

If you meet eligibility rules, payroll will contact you regarding the following:

Long term service Sick Leave Gratuity Vacation Pay Banked Overtime Pension Plan Voluntary Contributions

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TERMINATION OF EMPLOYMENT

Options available if non-vested: Option A: Lump Sum Payment Option B: Delayed Payment Option C: Transfer to New Employer’s Plan Option D: Deposit into an RRSPOptions available if vested: Option A: Deferred Pension Option B: Deposit Transfer Amount into RRSP Option C: Use Transfer Amount to purchase

Annuity Option D: Transfer to New Employer’s Plan

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DISABILITY PENSION

You are entitled to a disability pension if: You are under age 60 and have 10 years of

retirement service You have become totally and permanently

disabled as determined by the Committee and eligibility for Canada Pension Plan disability

You are unable to perform any suitable job AND

You have been disabled for at least four months

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DISABILITY BENEFIT

If you qualify, you receive an immediate pension for life. The calculation is similar to that of an unreduced pension with following adjustments:

An addition of 50% of pensionable service you expected to accrue between pension commencement date and age 60;

No bridge pension to age 65; No reduction for early retirement

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WHAT HAPPENS TO MY PENSION IF I DIE BEFORE RETIREMENT?

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POTENTIAL ADJUSTMENTS TO PENSION BENEFIT PAYMENTS

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POTENTIAL ADJUSTMENTS TO PENSION PLAN PAYMENTS…CONT’D

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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

Deferred Pension Beneficiary designation

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Where can I go for more information?

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INFORMATION SOURCES

Through your home computer: Go to the Pension website

Access your SD43 website Click on Resources>>Pension>>Links

Go to the Pension Calculator website www.aoncanada.com/SD43

To login, ensure you know your personal SD43 number and PIN provided on your last Annual Pension Statement

Access other websites

www.cra-arc.gc.ca www.servicecanada.gc.ca www.qp.gov.bc.ca www.pensionsbc.ca

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INFORMATION SOURCES—CONT’D

Read the Newsletters sent to you semi-annually in January and June

Review your Annual Pension Statement produced annually in June

Refer to the Plan Pamphlet “The Retirement Plan for Non-teaching Employees”

Refer to Seminar Handouts for specific Plan Contributions and Health Benefits

Contact Irene Schoemaker (ischoemaker@sd43.bc.ca) or call at 604-937-6715

Contact a Retirement Committee Plan Member (refer to list provided)

Discuss your financial goals and Pension options with your bank, and your financial planner

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OTHER CONSIDERATIONS FOR RETIREMENT “SAVINGS” Federal Tax-free Savings Accounts (TFSA) effective

January 2009 Contact your local bank/credit union for more info You are eligible to make up to $5,000 in annual

contributions (retro to the 2009 tax year)

Voluntary contributions through our Pension Plan Contact the Payroll Department for more information

Buybacks of Pensionable Service for Leaves in excess of 15 consecutive days through our Pension Plan Forms are available on the Pension website

CSB purchase through Payroll Department or outside banks

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We have given you some tools to work

with….

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ARE YOU READY FOR RETIREMENT??

FAQ’s and other Questions

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A HAPPIER RETIREMENT!

LIFESTYLE PLANNING

INFO GATHERING

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