Supporting a 10-year Guaranteed Life Pension
Currently, the “normal form” of pension for public safety members (Group 2 and 5) is a single life pension without a guarantee. The normal form is the basis on which your pension is established; in other words, the result of the standard pension formula is the value of your normal form of pension. You can choose different pension options at retirement. Single life option without a guarantee means if you pass away, there is no benefit paid to your beneficiary or estate. If you choose to add a guarantee to your pension or provide a survivor pension to your spouse should you die first, the pension is reduced to reflect the extra cost of the optional form and the added payment guarantee.
One of the proposed changes included in plan redesign is changing the normal form for all public safety members (Group 2 and 5) from a single life pension without a guarantee to a single life pension with a 10-year guarantee. With this change a member can receive a 10-year guarantee without having their pension reduced because of that choice. Should you choose not to take a guarantee option on your pension, it still results in a modest improvement in your pension payment. In contrast, if you elect a more expensive options form, it will decrease the cost of that more costly pension option.
This proposed change is being considered to apply to all public safety service (service as a member of Group 2 or 5) so long as you have at least one day of service in Group 2 or 5 on or after January 1, 2022.
One way of thinking about a guarantee on your pension is similar to life insurance. For example, with a 10 year guarantee you are locking in a guarantee of 10 years of pension payment from the date of retirement. If you die before 10-years post retirement, your beneficiaries would receive the remaining payment of your pension. For example, if you died six years after retirement, they would receive four years’ worth of pension payments.
To learn more about your pension options please visit: https://mpp.pensionsbc.ca/
Further, the plan partners are intending to increase the range of temporary annuity options available to all members, enabling any member to adjust how their pension income is distributed before and after age 65. Currently, a full TA is available, but the partners are proposing to introduce a half TA and a quarter TA option.
Caution: Be sure to consider any change in the context of all the proposed changes. You can check out information on the site about other changes.