Summary of Group 5 Proposed Changes
- A two-tiered system of contribution rates will be replaced with a simpler, more equitable single contribution rate for employees and employers within Group 5: Employee = 11.12%, Employer = 14.67%.
- Group 5 will move to a flat accrual rate of 2.12%.
- Due to Income Tax Act limits, the bridge accrual rate will decrease from 0.70% to 0.21%. This decrease is offset by the fact that members will see an increase in their lifetime pension. This change would only apply to service earned on or after January 1, 2022.
- One of the proposed changes for public safety (Group 2 and 5) is to change how the highest average salary (HAS) is calculated: from best five years to best four years of earnings. This proposed change is being considered to apply to all public safety service (service in Group 2 or 5) so long as a member has at least one day of service in Group 2 or 5 on or after January 1, 2022. With fewer years across which to average salary, the HAS will almost certainly be higher. This will have a positive impact on lifetime pension as most public safety members have a higher salary towards the end of their careers because of wage increases and promotions.
- Members would have a change in the normal form of pension from a single life with no guarantee to a single life with a 10-year guarantee. This provides an improvement on all pension whether the single life guaranteed 10 is taken or not.
- A portion of the surplus attributed to public safety will be moved to the group contributions rate rebalancing account (GCRRA). This will work to support rate stabilization for employees and employers.
Plan partners are also proposing to make changes that will benefit all members. These include:
- Establish a new health benefit trust to help fund access to post retirement group health benefits for retirees.
- Fund the rate stabilization account to mitigate increases in future contributions for either employers or employees.
- Strengthen inflation protections to support cost of living adjustments over the long-term for retired members.