UNIVERSITY OF OTTAWA PENSION PLAN

New Pension Plan Member

Luc Lauzière September, 2015 Last update: July 23, 2015

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AGENDASection 1-Pension Plan

Defined Benefit Pension Plan Financial Planning Pension Governance Structure Statistics Membership Required contributions (employee/employer) Benefit formula Pension indexation Survivor benefit options Pension beneficiaries Service Buy-Back Options upon termination of employment Pension Documents Contact us

Section 2-Working Tools Reference to Personal Statement and Annual Report Human Resources Web Site Pension Plan Fact Sheets Personalized Web Site Financial planner

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uOttawa.ca

Section 1 - Pension Plan Defined Benefit Pension Plan Financial Planning Pension Governance Structure Statistics Membership Required contributions (employee/employer) Benefit formula Pension indexation Survivor benefit options Pension beneficiaries Service Buy-Back Options upon termination of employment Pension Documents Contact us

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uOttawa.ca

DEFINED BENEFIT PENSION PLAN

The University of Ottawa Pension Plan is a defined-benefit plan. This means that, at the time of your retirement, you will receive a pension based on a formula that takes into account the average salary of your best 60 months of earnings and the number of years of credited service you have in the Plan.

-Average Salary -Contributions -Pension Service Employee and -Pension Formula Employer

-Investments

= = Pension Payable (Retirement) Required Funds

X Actuarial Factors

= Commuted Value (Death)

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uOttawa.ca

FINANCIAL PLANNING

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uOttawa.ca

6PENSION GOVERNANCE STRUCTUREOrganizational Chart of responsibilities and reporting relationships

Board of Governors

Executive Committee

Pension Plan Committee Pension Fund Investment Committee President

Treasurer/Director

Pension Fund

Assistant Director

Treasury & Pension Fund

Assistant Director

Private Market Investments

Treasury Analyst

Administrative Committee

V-P Resources

Associate V-P Human Resources

Director, HR Total Compensation

Associate Director, Pension Plans

Pension Plans Coordinator

Pension Plans Coordinator

Pension Fund Investment:- Policy recommendations- Investment Strategy

- Manager selection and oversight - Performance objectives

Key Advisors: Actuary; trustee/custodian; investment managers; consultants

Plan Sponsor and Administrator:- Governance structure- Policies (investment; funding)- Plan terms and provisions

Pension Plan Administration:- Member entitlements- Member communications

- Pension administration - Prescribed filings

Key Advisors: Actuary; trustee/custodian; regulatory authorities

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STATISTICS

University of Ottawa Pension Plan Statistics as at December 31, 2014: Fund Value 1,872,419,564 $ Pension Benefits Paid 62,874,961 $ Withdrawal/Transfers 8,556,068 $ Employee Contributions Remitted 18,026,633 $ Employer Contributions Remitted 45,360,470 $ Employer Special Contributions Remitted 2,788,800 $ Transfer Value in the Plan 3,332,198 $ Buy-Back Value in the Plan 813,869 $

Number of Retirees/Pensionners 2,021 Number of Active Member 3,496 Number of Deferred Member 776

Plan Activities as at December 31, 2014: New Members 210 New Retirees (active and deferred members) 107 Deceased Retirees 48 Terminated Members 93 Deceased Active Members 4 Amortized Buy-Back 55 Withdrawals/Transfers 62

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uOttawa.ca

MEMBERSHIPNew employees aged 30 or more

New employees who are eligible for employee benefits and are 30 or over must join the Plan as soon as they begin working at the University.

Employees under the age of 30Employees who are eligible for employee benefits and are under the age of 30 may become members from the start of their employment or on the first day of any month before turning 30 years old. If they do not elect to participate, they automatically become members on the first day of the month following their thirtieth birthday.

Effective May 1, 1992 , persons eligible for employee benefits and hired on that date or later have had to become members either

on the first day of the month immediately following two years of service at the University, or

on the first day of the month immediately following their thirtieth birthday.

Employees who do not fall in the above categoriesAny person who, in two consecutive calendar years, works 24 continuous months and either earns 35% of the YMPE (yearly maximum pensionable earnings*) or works at least 700 hours in each of these two consecutive calendar years may choose to become a member of the Pension Plan if he or she wishes to.

Re-hired pensionerA member who has retired under the University Pension Plan and is receiving a pension benefit cannot become a contributing member again if re-hired by the University.

*Year’s Maximum Pensionable Earnings (YMPE)

The Canada/Québec Pension Plan Yearly Maximum Pensionable Earnings is currently set at $53,600.

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uOttawa.ca

9REQUIRED CONTRIBUTIONS (EMPLOYEE/EMPLOYER)

A. Required employee contributions

Up to the Integration Level* 4.85%Above the Integration Level 7.50%

B. Employer contributions 13.29%

Current Integration Level $37,793

Your contributions are based on your regular salary, which does not include special income such as overtime pay, premium pay, bonus pay or second-salary sources. Because of the Canada Revenue Agency tax rules, the contributions you make to the University of Ottawa Pension Plan based on your salary are not subject to income tax. As a result, you save on tax immediately.

The following example illustrates how the contribution formula works. Your total contributions to the Plan for 2015 would be calculated as follows if you earned a yearly salary of $60,000.

4.85% of your salary up to $37,793 = $1,832.96 PLUS

7.50% of $22,207 ($60,000-$37,793) = $1,665.52

Total Contributions $3,498.48

*Integration levelThe University pension plan provides for a pension that differs for the portion of earnings below and above a certain threshold. The threshold of earnings is based on the maximum earnings (YMPE) covered for purposes of determining the pension payable from the Canada and Quebec Pension Plan and differs for service before and after January 1st, 2004. Currently the Canada and Quebec Pension Plan set this amount at $53,600 for 2015.

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uOttawa.ca

10PENSION BENEFIT FORMULA

A. Pension calculation formula (following the reform)• Average salary = 60 best months up to the maximum CRA prescribed salary of $154,172 as

at January 1st, 2015• For the Pre-2004 service the Integration Level is set at $31,790

Please note that there is no maximum pensionable service in the pension plan.

Service to December 31, 2003 (Pre-2004)

i) $31,790 X 1.3% X pension participation = aii) (Average salary - $31,790) X 2% X pension participation = b

Total annual pension pre-2004 (a + b) = c

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B. Pension calculation formula (post reform)• Average salary = 60 best months (Total pension service)• Pre-2004 set Integration Level of $31,790 indexed annually at a rate of 55 % of the increase in

the YMPE*

Service Post -2003i) $37,793 X 1.3% X pension participation = aii) (Average salary - $37,793) X 2% X pension participation = bTotal annual pension post-2003 (a + b) = d

Total Annual Pension UO (c + d)

MINIMUM PENSION TEST As part of the pension plan reform, a participant to the University pension plan is entitled to a

minimum pension equal to 1.5% for each pension year. (Average salary X 1.5% X pension participation)

MAXIMUM CRA PENSION RULEAs part of the CRA Pension rules, the maximum pension plan entitlement in a registered pension plan is $2,818.89 per year of pensionable service effective January 1st, 2015.

*Year’s Maximum Pensionable Earnings (YMPE)This is the amount the government sets each year, and uses to base your contributions to (as well as your benefits from) the Canada Pension Plan or Quebec Pension Plan. In 2015, the YMPE is $53,600. Annual changes to the YMPE are based on increases in average Canadian industrial wages.

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12PENSION CALCULATION EXAMPLE 1-Service to December 31, 2014

AGE: 60 years AVERAGE SALARY: $40,000SERVICE: 25 years INTEGRATION LEVEL: $31,790 / $37,793

1) SERVICE PRE-2004 i) $31,790 X 1.3% X 14 = $5,785.78ii) $8,210 X 2% X 14 = $2,298.80 $8,084.58

2) SERVICE POST-2003i) $37,793 X 1.3% X 11 = $5,404.40 ii) $2,207 X 2% X 11 = $485.54 $5,889.94

Total pension UO 1 + 2 $13,974.94

MINIMUM PENSION TEST ($40,000 X 1.5% X 25) = $15,000.00

3) CPP/QPP maximum reduced (-34.80%) pension = $8,332.56

Total UO + CPP/QPP = $23,332.56

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uOttawa.ca

13PENSION CALCULATION EXAMPLE 2 -Service to December 31, 2014

AGE: 60 years AVERAGE SALARY: $60,000SERVICE: 15 years INTEGRATION LEVEL: $31,790 / $37,793

1) SERVICE PRE-2004 i) $31,790 X 1.3% X 4 = $1,653.13ii) $28,210 X 2% X 4 = $2,256.80 $3,909.93

2) SERVICE POST-2003i) $37,793 X 1.3% X 11 = $5,404.40 ii) $22,207 X 2% X 11 = $4,885.54 $10,289.94

Total pension UO 1 + 2 $14,199.87

MINIMUM PENSION TEST ($60,000 X 1.5% X 15) = $13,500.00

3) CPP/QPP maximum reduced (-34.80%) pension = $8,332.56

Total UO + CPP/QPP = $22,532.43

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uOttawa.ca

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PENSION INDEXATION

A) Three steps indexation formula based on inflation from previous year(Consumer Price Index (CPI)-September to October)

1. Full indexation if inflation is less than 2%

2. 2% automatic indexation if inflation is between 2% and 3%

3. Inflation minus 1% if inflation is between 3% and 8% (Max 8%)

B) Special Ad Hoc indexation

Annual revisits of percentage not accorded in 2 & 3

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uOttawa.ca

15SURVIVOR PENSION BENEFIT TO THE SPOUSE AND GUARANTEE PERIODS

Standard Option 5 years guarantee / 60% Survivor benefit to the spouse• Therefore, if your death occurs on or before the guarantee period;

- and you are survived by your spouse, he/she will receive your full monthly pension until the end of the 5 years guarantee and then it will reduce to 60% for his/her lifetime. 

- and there is no surviving spouse, a lump sum representing the value of the remaining guaranteed monthly payments becomes payable to your Estate.

• Should your death occur after the guarantee period;- and your spouse survives you, his/her monthly benefit will be 60% of your benefit for her

lifetime.- and there is no surviving spouse, the pension payments cease; there is no death benefit

payable to the estatebecause the guarantee period is expired.

Optional Options 0 years guarantee / 60% Survivor benefit 10 years guarantee / 60% Survivor benefit 15 years guarantee / 60% Survivor benefit 100% lifetime with 0-5-10-15 years guarantee periods

-Reduction of approx. 15% for the 100% survivor benefit-Reduction of approx. 2% for a 10 years guarantee period-Reduction of approx. 5% for a 15 years guarantee period

Note: There is only one choice at retirement .

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PENSION BENEFICIARIES

Pre-retirement (Pension Benefit Value payable):

1) Spouse

The person married to you by a religious or civil ceremony or with whom you have been living in a relationship that resembles a marriage for at least one year and whom you have designated in writing to the University as your spouse. Based on pension plan text, waiver of spousal benefit allowed before retirement.

2) Designation or Estate

Post-retirement (Survivor Benefit payable based on choice):

3) Spouse

Same as above. Based on pension plan text, no waiver of spousal benefit is offered at retirement.

2) Children

Your eligible dependent children as per the provisions of the plan are your natural or adopted children under 19 at retirement whom you support and/or who is under age 27 and a full time student in a recognized education institution and/or is physically or mentally disabled.

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uOttawa.ca

BUY-BACK OPPORTUNITIES

As a member of the University of Ottawa Pension Plan, you may be able to buy pension credits in the Plan for the following :

years of service transferrable from another employer following your employment with the University;

years of University service where you could have contributed but did not; years of University service where you contributed but then had refunded to you; periods of leave without pay with no pension contributions; periods of parental leave or special educational leave with no pension contributions; shortfall payment following your transfer from another employer.

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uOttawa.ca

OPTIONS UPON TERMINATION OF EMPLOYMENTIf you leave the Plan before becoming eligible to receive an immediate pension, the options available to you depend on how long you participated in the Plan or your age when you leave the University. The options are as follows :

1. If you are under age 55, you can : a) Leave your pension at the University as a deferred pension and payable at age 60; b) Transfer the value of the pension to another employer's registered pension plan, if that employer accepts the

transfer; c) Transfer the value of the pension to a locked-in*registered retirement savings plan or life income fund

The commuted value of your annual accrued pension will be transferred, subject to the limits prescribed by the Canada Customs and Revenue Agency-RCA, into a locked-in retirement account (LIRA), into a life income fund (LIF), to your new employer's plan (the limits prescribed by the RCA will apply for hybrid and defined contribution plans) or to an insurance company for the purchase of a life annuity. The commuted value shown above is only an estimate of the amount that may be payable in the event of termination of your employment. In fact, the commuted value of your benefits will depend on the assumptions used at the time of termination of your employment, in accordance with the recommendations of the Canadian Institute of Actuaries (CIA). Please also note that the CIA changed the standards for calculating these values. These changes came into effect on April 1, 2009 and will apply to any event occurring after this date. Based on the new standards, the value could be higher or lower depending on the economic conditions at the time of the event.

2. If you are 55 or over, you have the following options: a) start receiving a reduced pension; b) defer your pension until you reach factor 90 or age 60;

*Locked-in"Locked in" means that your funds cannot be withdrawn before age 55 (earliest age a pension may be received under the Pension Plan), and can only be used to generate a pension/payment benefit or be transferred to a life income fund.

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PENSION DOCUMENTS

Regulatory Documents:Statutory Declaration of Civil Status and Dependent DeclarationEnrolmentDesignation of Pension Beneficiary

Legal Documents:Birth CertificatesMarriage Certificate

Administrative Documents:Buy-Back ContractTransfer of Service Agreement

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uOttawa.ca

CONTACT US

Pension Sector (Tabaret Hall-019) hrpension@uottawa.ca

Luc LauzièreAssociate Director, Pension Plans Tel.: 2652 Luc.Lauziere@uOttawa.ca

Micheline MoreauPension Plans Coordinator (Operations and Buy-Backs) Tel.: 1206 Micheline.Moreau@uOttawa.ca

Louise PelletierPension Plans Coordinator (Benefits and Transfers) Tel.: 1747 lpellet2@uOttawa.ca

Sylvie LaflammeAdministrator, Pension Plans Data Tel.: 1536 Sylvie.Laflamme@uOttawa.ca

Sara BoucherAdministrator, Benefits and Services to Pensioners Tel.: 5375 Saraboucher@uOttawa.ca

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uOttawa.ca

Section 2 - Working Tools Reference to Personal Statement and Annual Report Human Resources Web Site Pension Plan Fact Sheets Personalized Web Site Financial planner

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uOttawa.ca

22PERSONAL STATEMENT AND ANNUAL REPORT

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uOttawa.ca

23HR WEB SITE: www.uottawa/human-resources/

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uOttawa.ca

24PENSION PLAN FACT SHEETS

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25PERSONALIZED WEB SITE

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26FINANCIAL PLANNER

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QUESTIONS

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