No. The average years of service at retirement for plan members as of 2019 is 17 years. A very small group of members (4%) achieve 35 years of service before age 60, with 61 being the average age of retirement in 2019.

Members who work beyond 35 years may still continue to improve the pension they receive at retirement if their earnings increase as it will raise their five year’s highest average salary (HAS) which is used to calculate their pension even though they are no longer making pension contributions. Their take-home pay will also increase as they would no longer be contributing to the plan.

If approved, the plan design changes proposed by the plan partners will come into effect on January 1, 2022. The new rules will be applied on new service on and after this date. New rules will not affect service earned up to this date.

There are no changes to the lifetime pension benefit for retired members.

However, the plan partners and board have and continue to strengthen the plan’s inflation protection in three ways:

• After the 2015 valuation, the board increased the percentage of the contribution going into the Inflation Adjustment Account (IAA). In 2015 dollars, that was worth at least $3 billion. Because retired members make up about a third of the membership, that means at least $1 billion is directly benefitting current retired members. That decision also helped increase the COLA (cost-of-living adjustment account) cap.
• In accordance with the plan’s funding policy, excess investment returns have been moved out of the basic account into the IAA. That happens when the five-year annualized rate of return exceeds the actuarially assumed rate of return. That has totaled about $1.2 billion since 2015.
• The plan design proposal includes provisions that ensure future surpluses will be transferred 50/50 to the IAA (and Rate Stabilization Account (RSA)) to further support indexing when needed.

The other proposed change in the plan redesign that will affect retired members is related to establishing a new health benefit trust. The trust’s governance framework has not been finalized, but it will provide an opportunity for meaningful input from retired members. The trust will be able to retain unused contribution amounts and invest them to accumulate investment gains. The health benefit trust will receive approximately $100 million in seed money which will also be invested for the purpose of funding the benefit trust to provide retiree group benefits.

The plan partners had hoped to implement changes on January 1, 2021. However, given the fluid situation with COVID-19, they adjusted the schedule and postponed planned outreach to members and employers until Fall 2020. They also extended the outreach window from four to six weeks. They believe that now is an appropriate time to share detailed information on the proposed changes with members, employers, and key stakeholders. Implementation is now planned for January 1, 2022.

No, all proposed changes are on a go-forward basis only for group 1. Also, the plan cannot reduce the benefits which have already been paid.

The primary factors which led to an unintentional imbalance are:

• the rise in the YMPE (year’s maximum pensionable earnings which aligns with the average Canadian industrial wage and is a factor in the calculation of the appropriate contribution rates) outpacing the growth in wages in British Columbia, and
• the established formula to determine the above/below YMPE contribution rates falling out of step with the benefit being accrued.

These imbalances emerged over time, are not easily pinpointed for individuals and amounts, and will vary between members.

The proposed changes resolve the imbalance between contributions made and benefits earned by proposing to implement a flat benefit accrual and single contribution rates on a future-service basis and provide a set of benefit improvements.