1

University of Windsor New Faculty Outline of Benefits 2006

July, 2006

2

Presentation Overview

Types of Pension Plans Faculty Pension Plan Life as an Active Member Joining the Pension Plan Retirement Survivor Options Terminating Membership Past Service Pension Adjustments Monthly Pension Indexing Overview of Health, Dental, Life and additional benefits

3

Types of Pension Plans

Defined Benefit Plans (DB) Benefit is defined by a formula Pension at retirement is always known Most often the employer assumes the investment risks / rewards

Defined Contribution Plans (DC) Contributions are defined by a formula Pension at retirement is unknown Most often the employee assumes the investment risks / rewards

Hybrid Plan – a combination of DB and DC Attempts to provide the best of both worlds

4

Faculty Pension Plan

Hybrid Pension – Two Components

Money Purchase (MPP) (Defined Contribution)

AND

Minimum Guarantee (MGP) (Defined Benefit)

5

Faculty Pension Plan

Money Purchase (Defined Contribution)

6% Member Contribution PLUS 6% University Contribution credited to individual member accounts along with fund rate of return

Money Purchase Pension (MPP), payable monthly at retirement

MPP = Total MPC Account at Retirement Actuarial Annuity Factor

• Actuarial assumptions include mortality, retirement age, and spousal age.

6

Minimum Guarantee (Defined Benefit)

1.5% of Best Average Earnings (BAE) up to Final Average YMPE (FYMPE)

PLUS 2 % of BAE above FYMPE

Multiplied by Years (and part years) of Pensionable Service in the plan

Faculty Pension Plan

7

Plan Definitions BAE = 12 X average of Members monthly earnings in

the 48 months of highest earnings, (not necessarily consecutive) prior to retirement.

Earnings = Member’s basic nominal salary, excludes overload, allowances, bonuses or stipends etc.

YMPE = Year’s Maximum Pensionable Earnings in effect under the Canada Pension Plan.

• (2006 = $42,100) (2005 = $41, 100) (2004 = $40,500) (2003 = $39,900)

FYMPE = Average of YMPE during same period used to determine your BAE.

8

Life as an Active Member

Contributions – 6% of nominal salary, with matching University contribution, subject to CCRA contribution limits. This includes nominal salary paid in the form of a Research Grant. Special rules for certain types of leaves such as sabbaticals, education leaves.

Once an enrolled active member you may not opt out.

Pensionable earnings, service and contributions captured monthly

Immediate Vesting – ownership of pension benefits

Pension Adjustment – T4 - deemed value of one year plan participation – reduces personal RRSP room

Annual Pension Statement – within 6 months of plan year end

Plan Year runs from July 1st to June 30th of each year

9

Faculty Pension Plan – Joining the Plan

Full Time, Permanent Faculty Compulsory membership coincident with or next following

Employment Date.

Limited Term AppointmentsVoluntary participation coincident with or next following Employment

Date.

Sessional Instructors and Part Time EmployeesVoluntary participation coincident with or next following the completion of 24 months of Continuous Service provided you have:(1) earned at least 35% of the CPP Year’s Maximum Pensionable Earnings or(2) worked at least 700 hoursin each of the two (2) immediately preceding calendar years.

10

Normal Retirement Date - July 1st following the last day of the contract year in which the member

attains age 65 - minimum age 65 to receive an

unreduced pension

Early Retirement Date - anytime after age 55 - MPP pension is account balance

annuity - MGP subject to actuarial reduction

- upon mutual consent

Faculty Pension Plan – Retirement

11

Date of retirement = September 1, 2006 Pensionable Service = 35 years Best average earnings = $90,000 Final average YMPE = $40,900 MPC Account Balance = $500,000 Actuarial annuity factor = 10.2203

MPP = $500,000/10.2203 = $48,922.24 per year

MGP = [35] x [0.015 x $40,900 + 0.02 x ($90,000 - $40,900)] = $55,842.50 per year

Basic Benefit payable at retirement = $55,842.50 per year

Example of Annual Pension Payable

12

Faculty Pension Plan – Survivor Options

Death while active – Greater of MPP account or MGP value Lump sum or Spousal Monthly Pension

Death after Retirement – based on option chosen at retirement If single at retirement or with spousal waiver

• Life Only, Life 5, 10 or 15 If legal spouse at retirement or no spousal waiver on file

• Joint and Survivor 60, 66 2/3(Guar 5), 75 or 100%

Basic pension reduced 10% to 20% to provide spousal benefit

Spouse and member can waive 60% option

In ALL cases, options are permanent on 1st date of retirement

13

Faculty Pension Plan – Terminating before Retirement

Termination Benefit is the Greater of: Money Purchase Component Account balance to-date Commuted value of Minimum Guaranteed Pension earned to-date

Transfer Options: Transfer termination benefit to a locked-in vehicle if employed > 24 months Transfer termination benefit to a non locked-in vehicle if employed < 24 months Leave benefit in plan for deferred pension at a future retirement date Transfer to a new employer, if allowed

At Retirement - In Lieu of Pension, Members MAY transfer entitlements from plan Considered a termination, not a retirement Forfeit Minimum Guarantee Pension, lifetime pension indexing rights Higher investment fees, potentially greater investment risk to member Forfeit rights to Benefits, Tuition Remission, H.K. memberships etc. Forfeit future Surplus sharing

14

Past Service Pension Adjustments

What are they?

Adjustments most often created by retroactive pension plan improvements

• Example: MGP formula change from 1.45%/2% to 1.5% / 2%

University must calculate value of retroactive improvement and

report this to Canada Customs and Revenue Agency (T215)

Further reduces personal RRSP room and sometimes forces

RRSP withdrawals

15

Faculty Pension Plan – Indexing Monthly Pension

Both the MPP and MGP adjusted every July 1

MPP adjusted by the fund rate of return in excess of 6% and an additional adjustment for mortality experience – can increase or decrease

MGP increase based on the increase in the Consumer Price Index

After the MPP and MGP have been adjusted (plus or minus), we compare the two, the larger amount becomes the new pension payable starting at July 1st

Indexing rights passes to those with a Survivor pension

16

Faculty Plan – Health Insurance Overview

Benefits are effective with your date of employment. Green Shield Canada provides single or family coverage. Coverage includes:

Drugs Semi-private and Private hospitalization Extended health services, including

• Registered Massage therapy - $600 per calendar year• Physiotherapist – no maximum• Chiropractic - $450 per calendar year• Speech therapy - $800 per calendar year• Psychologist – 15 visits per calendar year paid at 50% of the fee schedule

Out of Province/Country coverage – referral / emergency 180 days per visit Vision - $350 every 24 months Eye exams - $75 every 24 months Audio – hearing test $75 every 5 years, hearing aid $1,500 every 5 years

Annual $10/$20 deductible Health benefit premiums are paid by the University

17

Faculty Plan – Dental Insurance Overview

Benefits are effective with your date of employment. Green Shield provides single or family coverage. Coverage includes:

80% coverage for Basic & Comprehensive Services 80% coverage for Major Restorative Services 50% for Orthodontic Services - $3,000 individual lifetime maximum Basic services cover recalls every 9 months Paid at the current year O.D.A. rates Dental services may be subject to limitations

Dental benefit premiums are paid by the University

18

Faculty Plan – Group Insurance Overview

Benefits are effective with your date of employment.

Short Term Disability program (Employer Insured) Provides 105 days fully paid salary

Long Term Disability insured by Great West Life Provides pro-rated benefit to a maximum of $10,000 monthly indexed LTD premium is Employee paid – LTD benefit is Non Taxable

Basic Life Insurance (Sun Life) A.D.&D. (Chubb) Insurance benefit of three (3) times annual salary, rounded to the next highest

$1,000 – to a maximum of $350,000 University paid Premiums

Optional Life, Dependant Life and A.D.&D. available Employee paid Premiums

19

Faculty Plan – Additional Faculty Benefits

Benefits are effective with your date of employment.

Employee Assistance Program (EAP) Full Time Faculty , their dependants (to age 21) and spouse eligible for EAP. Provided by Warren Scheppell, a leader in EAP programs Provides confidential assistance and counseling with issues such as marital or family relations,

elder / child care, stress management, substance abuse, some legal assistance etc.

Tuition Remission (taxable benefit) Full Time Faculty , their dependants and spouse eligible for free tuition. Sessional Instructors entitled to one tuition credit course per year in a year the Instructor

teaches one (1) or more courses. Some limitations apply to this benefit. Contact Human Resources.

St. Denis Centre – Fitness Facility (non taxable benefit) Full Time Faculty, their dependants and spouse entitled to free basic membership. Sessional Instructors are provided with membership during the semesters in which they are

teaching. Some limitations apply to this benefit. Does not include access to the Forge. Contact the St.

Denis Centre for more information.