public service shared risk plan (pssrp) 2015 pensions & employee benefits division (pebd)...

Public Service Shared Risk Plan (PSSRP)2015

Pensions & Employee Benefits Division (PEBD)Department of Human Resources

http://www.gnb.ca/pssrp

Retirement Planning Session

This presentation is for information purposes only. No rights are conferred by this presentation. The Public Service Shared Risk Plan Document and Funding Policy, the New Brunswick Pension Benefits Act, and the Income Tax Act supersede this presentation where discrepancies may occur. For authoritative wording regarding this pension plan, please refer to the Plan Document for the Public Service Shared Risk Plan.


Disclaimer

Agenda• Overview of PSSRP

• Benefits Payable upon Termination/Death

• Other PSSRP Provisions

• Insured Benefits

• Other Key Points

• Questions


PSSRP GovernanceA Board of Trustees is responsible for the administration of the PSSRP

6 individuals have been appointed as Trustees including:• 3 union members• 3 government members (includes 1 retiree)

2 observers

The Board of Trustees administers the PSSRP in accordance with:

http://www.gnb.ca/pssrpPSSRP Overview

Employee ContributionsCurrent Rates• 7.5% of earnings up to YMPE• 10.7% of earnings in excess of YMPE

* YMPE: Year’s Maximum Pensionable Earnings under theCanada Pension Plan (CPP) – 2015 YMPE = $53,600.

* CPP deductions cease upon reaching the YMPE.


Contribution rate

increases when

salary accumulation

reaches YMPE

VestingEntitlement to pension benefits

Vesting under the PSSRP occurs upon the completion of the earlier of:

• Five years of continuous employment; or

• Two years of pensionable service in the PSSRP (including pensionable service in the Public Service Superannuation Act (PSSA)); or

• Two years of membership in the PSSRP, including membership in any of the following predecessor pension plans:

The Pension Plan for Part-Time and Seasonal Employees of the Province of NB (PT&S); or

The PSSA.


Benefits Accumulated

In determining the benefits accumulated, pensionableservice needs to be separated as follows:




* Calculation prior to any early retirement reduction factorand Cost of Living adjustment

Bridge Benefit Prior to Age 65• The Bridge Benefit (also known as Integration) is intended to supplement

your income until age 65, at which time it ceases and you are eligible for an unreduced CPP pension.

• CPP contributions are required on earnings up to YMPE.

• PSSRP contribution rates:

lower on earnings up to YMPE, to recognize required contributions into two plans.

higher on earnings above YMPE, as no CPP contributions.


Bridge Benefit Prior to Age 65

• Benefit accrual rates are based on contribution rates.

• The bridge benefit under the PSSRP and your CPP benefits may not be the same amount.

• The PSSRP bridge benefit is payable as early as age 55, regardless of age at which CPP pension begins.


Active Member Calculation


COLA assumed to be 1.7% each year Same concept applies to benefits payable at age 65 Calculation prior to any early retirement reduction factor

Early Retirement Reduction Factors


Cost of Living Adjustment• Each year, based on the funding level of the PSSRP, it will be determined

whether the plan is able to provide indexation – also known as Cost of Living Adjustment (COLA):

The financial report (Actuarial Valuation) will outline the funding level of the PSSRP; and

The PSSRP’s Funding Policy will outline how much COLA could be provided (up to average change in Consumer Price Index (CPI)).

• The PSSRP is designed to provide average cost of living adjustments in excess of 75% of the CPI over a 20 year period.

• When COLA is provided, it will apply to active employees,retirees and deferred members.


Statement of Benefits

PSSRP Overview http://www.gnb.ca/pssrp

Pension Estimate Calculator

PSSRP Overview

• Can be used with or without the information provided on yourEmployee Statement of Pension Benefits.

• The Calculator Tool is located on our website at: http://www.gnb.ca/pssrp

Example of a plan member approaching retirement: Employee will be 59 years old on Nov. 30th/15 will be terminating employment on Nov. 30th/15 Pension start date of Dec. 1st/15

Information on statement:




Pension Estimate Calculator


Pension Estimate Calculator Results

(3% x 1 year) (5% x 6 years)

* Gross amounts

Forms of PensionThere are various forms of pension at retirement:


* Normal Form of Pension

Life Pension – 5 Year

Guarantee

Joint & Survivor at

50%*


Guarantee


Guarantee

Joint & Survivor at

60%

Joint & Survivor at

100%

Forms of PensionJoint and Survivor at 50%

• Payments made during lifetime of retiree.

• If retiree dies before spouse, payments continue to spouse (spouse at date of death) for remainder of spouse’s life.

• 50% of pension amount at age 65 (before application of any early retirement reductions) payable to spouse, or eligible dependent if spouse dies or no spouse.

• If member has a spouse, a Spousal Waiver form must be completed bythe member’s spouse at time of retirement.


Forms of PensionJoint and Survivor at 60% or 100%


• If retiree dies before spouse, payments continue to spouse (spouse at date of retirement) for remainder of spouse’s life.

• 60% or 100% of pension amount at age 65 (after application of any early retirement reductions) is payable to spouse.

• If no spouse or if spouse dies, 50% of pension amount at age 65 (before application of any early retirement reductions) is payable to eligible dependent.


Forms of PensionLife Pension Guarantee (5, 10 or 15 Years)


• If retiree dies before end of guarantee period, the Designated Beneficiary receives the remaining pension payments (being the pension payable at age 65, after application of any early retirement reductions) through monthly installments.

• If member has a spouse, a Spousal Waiver form must be completed by the member’s spouse at time of retirement.


Designated Beneficiary• A member may designate a beneficiary or beneficiaries to receive any

benefit which may be payable under the terms of the PSSRP upon the death of the member.

• Upon the death of the member, if there is no spouse, eligible dependent or designated beneficiary, any death benefits will be payable to the member’s estate.

• If an active or deferred member designates a person other than his/her spouse as a beneficiary, the entitlement of the spouse shall supersede the entitlement of the beneficiary to a death benefit.


Preliminary Retirement Statement

Under the Income Tax Act,an optional form of pensioncannot be larger than theNormal Form of Pension (Option A).


Date of termination: November 30, 2015 Date on which pension entitlement will commence: December 1, 2015 SECTION #1 – OPTIONS AVAILABLE Your retirement benefit options are: (choose only one) Monthly amount payable _________________________________ To Pensioner On death of

pensioner A. Joint Life and Survivor Option payable at 50% to the surviving spouse at member's death (or to eligible children if no spouse)

from December 1, 2015 to November 1, 2021 $4,723.19 $1,906.62 from December 1, 2021 $3,643.14 $1,906.62 B. Joint Life and Survivor Option payable at 60% to the surviving spouse specified at time of retirement (or eligible children upon death of spouse based on Joint Life and Survivor Option payable at 50%)

from December 1, 2015 to November 1, 2021 $4,700.83 $2,172.46 from December 1, 2021 $3,620.76 $2,172.46 C. Joint Life and Survivor Option payable at 100% to the surviving spouse specified at time of retirement (or eligible children upon death of spouse based on Joint Life and Survivor Option payable at 50%)

from December 1, 2015 to November 1, 2021 $4,546.66 $3,466.59 from December 1, 2021 $3,466.59 $3,466.59 D. Life Pension with 10 Year Guarantee from December 1, 2015 to November 1, 2021 $4,723.19 $3,643.14 from December 1, 2021 to November 1, 2025 $3,643.14 $3,643.14 from December 1, 2025 $3,643.14 $0.00 E. Life Pension with 15 Year Guarantee from December 1, 2015 to November 1, 2021 $4,672.48 $3,592.42 from December 1, 2021 to November 1, 2030 $3,592.42 $3,592.42 from December 1, 2030 $3,592.42 $0.00

Schedule of Pension Payments Paid on the 24th of each month Pension Benefit begins the month after you become eligible

Upon the death of a pensioner

Date of terminationMay 10th

First paymentJune 24th

Date of deathMay 10th

Last paymentMay 24th


Termination Benefits

If a member is not vested:

• Member receives a refund of their contributions with interest.

• The amount is payable as cash or can be directly transferred into an RRSP.

Benefits Payable upon Termination/Death http://www.gnb.ca/pssrp

Termination BenefitsIf a member is vested (prior to age 55)

• Member can defer their pension benefit;

If the member defers their pension, the pension can begin as early as age 55 (reduced) and no later than age 65 (unreduced).

OR

• Member can elect to transfer the Termination Value to a retirement savings arrangement on a locked-in basis (LIRA, LIF, etc.)

The Termination Value will not be less than the member’scontributions plus interest

http://www.gnb.ca/pssrpBenefits Payable upon Termination/Death

Termination BenefitsIf a member is vested (on or after age 55)

• The member has the following options:

Choose to begin receiving their pension immediately; or

Defer their pension benefit until a date between their 55th and 65th birthday and receive a reduced pension benefit; or

Defer their pension benefit until age 65 and receive an unreduced pension.


Prior to retirement (Non-Vested Member)

• Refund of member’s contributions with interest to member’s surviving spouse or designated beneficiary/estate if there is no spouse.


Death Benefits

Death BenefitsPrior to retirement (Vested Member)

• If member has a spouse, the spouse has the option to:

receive a monthly pension benefit of 50% of the amount payable at age 65 (before application of early retirement reductions); or

receive a lump sum payment equal to the Termination Value.

• If member does not have a spouse, the designated beneficiary/estate will receive a lump sum payment equal to the Termination Value.

• If an eligible dependent is the designated beneficiary, a monthly pension as described above is available instead of the Termination Value.

* The entitlement of the spouse shall supersede the entitlement of any beneficiary designation.


At retirement (If a member dies after pension commenced)

• The death benefit will be paid in accordance with the form of pension benefit the member elected at retirement.


Death Benefits

A member may be able to purchase the following periods of service(certain restrictions apply):

• Previously refunded service

• Authorized leave without pay (e.g., maternity)

• Prior non-contributory full-time and part-time service (e.g., casual employment)

• Long Term Disability Waiting Period

• MLA Service

Other PSSRP Provisions http://www.gnb.ca/pssrp

Purchase of Pensionable Service

• The cost to purchase service varies depending on the type of service being purchased.

• In most cases, the cost to purchase service will be the greater of:

one times the current contribution rate; or

the adjusted termination value.

Other PSSRP Provisions http://www.gnb.ca/pssrp

Purchase of Pensionable Service

• A reciprocal transfer agreement (RTA) permits the portability of pension benefits between pension plans.

• Currently there are RTAs between the PSSRP and:

the Pension Plan for Part-Time and Employees of the Province of New Brunswick (PT&S);

the national public service pension plans (this includes all 10 provinces); and

the Government of Canada Public Service pension plan.

• Other reciprocal transfer agreements are being negotiated.Members will be notified when new agreements come into effect.

http://www.gnb.ca/pssrpOther PSSRP Provisions

Reciprocal Transfer Agreements

Marriage Breakdown Provisions• The pension plan permits the division of pension assets upon marriage

breakdown.

• This applies to agreements, judgments or court orders dated afterDecember 31, 1996.

• Our office will determine, based on an actuarial calculation, the eligible amount available for division based on the agreement, judgment or court order.

• Funds are transferred on a locked-in basis.

• There are no provisions in the pension plan for purchasing the lostbenefits as a result of a marriage breakdown.


Work Time Flexibility ProgramOnly full-time members of the PSSRP who are withinfive years of retirement may apply.

• Reduce work schedule (as low as 50% of full-time).

• Pay contributions on full-time salary.

• Receive full-time pension credit.

• Subject to Employer Approval and CRA limitations.

• Elected retirement date is irrevocable.


Dental Benefits

Transfer from Active Plan to Retiree Plan. You are only eligible to continue in the plan if you are participating in as an

active employee in the UNB Dental Plan.

Monthly Premium

http://www.gnb.ca/pssrpInsured Benefits

Dental Insurance

Single Coverage Family Coverage

$20.15 $40.29

Other Key Points• You should inform your employer at least six months in advance of your

retirement date to ensure you receive your pension in the month following your termination date.

• The PSSRP Employee Booklet is available on our website which provides detailed information on the provisions of the plan.

• Pension estimates can be calculated using the Pension Calculator Tool available on our website: http://www.gnb.ca/pssrp.

• Formal pension estimates can be requested if you are within 12 months of your retirement date.

• If you have questions regarding the pension options available at retirement, please contact one of our Benefits Counselors.


Contact Information

Additional Information


Questions?


public service shared risk plan (pssrp) 2015 pensions & employee benefits division (pebd)...

Documents

cpp benefits

pssrp bridge benefit

thecanada pension plan

pssrp provisions

cpp contributions

pssrp contribution rates

unreduced cpp pension

excess of ympe ympe