Police and Firefighter Retirement Seminar
Reg. T.M. Municipal Pension Board of Trustees
Retirement SeminarRetirement Seminar
2004-029 MPP 2006.10.20 NRA60
AgendaAgenda
• AdministrationAdministration
• Basics of the Municipal Pension PlanBasics of the Municipal Pension Plan
• Pension formulaPension formula
• Special Agreement contributionsSpecial Agreement contributions
• Pension optionsPension options
• Other factors that affect your pensionOther factors that affect your pension
• Increasing pensionable serviceIncreasing pensionable service
• Retirement processRetirement process
• After retirementAfter retirement
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Retirement SeminarRetirement Seminar
2004-029 MPP 2006.10.20 NRA60
Municipal Pension PlanMunicipal Pension Plan
Governed by:Governed by:
• Municipal Pension Plan Joint Trust AgreementMunicipal Pension Plan Joint Trust Agreement
• Municipal Pension Plan RulesMunicipal Pension Plan Rules
• Municipal Pension Board of Trustees, composed Municipal Pension Board of Trustees, composed of employer and employee representativesof employer and employee representatives
Administered by:Administered by:
• The BC Pension CorporationThe BC Pension Corporation
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Retirement SeminarRetirement Seminar
2004-029 MPP 2006.10.20 NRA60
Web ServicesWeb Services
Visit our website for plan informationVisit our website for plan information
mpp.pensionsbc.campp.pensionsbc.caAccess Access My AccountMy Account for: for:
• a copy of your a copy of your Member’s Benefit StatementMember’s Benefit Statement
• online pension estimatoronline pension estimator
• online purchase cost estimatoronline purchase cost estimator
• view your account informationview your account information
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Retirement SeminarRetirement Seminar
2004-029 MPP 2006.10.20 NRA60
BasicsBasics
• The Municipal Pension Plan The Municipal Pension Plan is a defined is a defined benefit plan. benefit plan.
• Your personal contributions do not affect Your personal contributions do not affect your final benefityour final benefit
• A formula determines your pension benefit:A formula determines your pension benefit: AgeAge SalarySalary Pensionable servicePensionable service
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Retirement SeminarRetirement Seminar
2004-029 MPP 2006.10.20 NRA60
BasicsBasicsAgeAge• Normal retirement age 60Normal retirement age 60• Earliest retirement age 50Earliest retirement age 50
SalarySalary• Highest Average Salary (HAS)Highest Average Salary (HAS)
ServiceService• Contributory service determines eligibility and Contributory service determines eligibility and
reductionsreductions• Pensionable service determines benefits ($)Pensionable service determines benefits ($)
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Retirement SeminarRetirement Seminar
2004-029 MPP 2006.10.20 NRA60
Unreduced PensionUnreduced Pension• Age 50 to 55 and your age plus contributory Age 50 to 55 and your age plus contributory
service totals 80 or moreservice totals 80 or more
• Age 55 or older with two years or more of Age 55 or older with two years or more of contributory servicecontributory service
Reduced PensionReduced Pension
• pension is subject to a reduction if pension is subject to a reduction if either of the above tests are not meteither of the above tests are not met
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Retirement SeminarRetirement Seminar
2004-029 MPP 2006.10.20 NRA60
AgeAge 51 years 2 months51 years 2 months
ServiceService 28 years 10 months28 years 10 months
TotalTotal 79 years 12 months 79 years 12 months
== 80 80
= = Unreduced Unreduced pensionpension
Example of Rule of 80Example of Rule of 80
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Retirement SeminarRetirement Seminar
2004-029 MPP 2006.10.20 NRA60
3% Reduction Factor3% Reduction Factor
• Terminate at age 45 to 50, with 10 years or Terminate at age 45 to 50, with 10 years or more of contributory servicemore of contributory service
• Terminate at age 50 or later and vestedTerminate at age 50 or later and vested
• Calculated from lesser of 80 or age 55Calculated from lesser of 80 or age 55
• Maximum reduction is 15%Maximum reduction is 15%
Otherwise, the reduction is 5% per year to a maximum of 25%
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Retirement SeminarRetirement Seminar
2004-029 MPP 2006.10.20 NRA60
Example of a Reduced PensionExample of a Reduced Pension
• Terminated employment May 31, 2007 at age 54Terminated employment May 31, 2007 at age 54with 23 years of contributory servicewith 23 years of contributory service
• Immediate pensionImmediate pension
• Reduction in pension:Reduction in pension:
Lesser is 2Lesser is 2Reduction is 3% Reduction is 3% xx 2 2 == 6% 6%
23 23 ++ 53 53 == 76 7680 80 -- 76 76 == 4 455 55 -- 53 53 = = 22
A $3,000 pension is reduced to $2,820 (without SA)
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Retirement SeminarRetirement Seminar
2004-029 MPP 2006.10.20 NRA60
8080 70%70%Age and Service Affect Your PensionAge and Service Affect Your Pension
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Retirement SeminarRetirement Seminar
2004-029 MPP 2006.10.20 NRA60
Pension FormulaPension Formula
$
A.A. Pension Formula to age 65Pension Formula to age 65
=B.B. MinusMinus Bridge Benefit at age 65 Bridge Benefit at age 65
$=
$=Your monthly unreduced lifetime Your monthly unreduced lifetime pension (pension (A - BA - B) from age 65) from age 65
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Retirement SeminarRetirement Seminar
2004-029 MPP 2006.10.20 NRA60
2%2%(0.02)(0.02)
5-year 5-year Highest Highest AverageAverageSalarySalary
(monthly)(monthly)
xxYears of Years of
PensionablePensionableServiceService
xx $$
A.A. The Pension FormulaThe Pension Formula
Your basic monthly pension is calculated in two steps:Your basic monthly pension is calculated in two steps:
==
Minus ...Minus ...
Pension FormulaPension Formula
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Retirement SeminarRetirement Seminar
2004-029 MPP 2006.10.20 NRA60
Pension FormulaPension Formula
B.B. The Bridge BenefitThe Bridge Benefit
YMPE YMPE == Year’s Maximum Pensionable Earnings. Used in the Year’s Maximum Pensionable Earnings. Used in the determination of your Canada Pension Plan, and is updated determination of your Canada Pension Plan, and is updated annually to reflect the national average industrial wage. The annually to reflect the national average industrial wage. The YMPE for 2007 is $43,700 ($3,642 monthly).YMPE for 2007 is $43,700 ($3,642 monthly).
0.7%0.7%(0.007)(0.007)
Lesser ofLesser of5-year Highest 5-year Highest Average SalaryAverage Salary
or YMPEor YMPE(monthly)(monthly)
xxYears of Years of
PensionablePensionableServiceService
xx $$==
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Retirement SeminarRetirement Seminar
2004-029 MPP 2006.10.20 NRA60
Calculating Highest Average SalaryCalculating Highest Average Salary
YearYear
20082008
20072007
20062006
20052005
20042004
20032003
PensionablePensionable ServiceService
7.007.00
12.0012.00
12.0012.00
12.0012.00
12.0012.00
5.005.00
60.00 months60.00 months
SalarySalary
$45,966$45,966
$78,783$78,783
$79,086$79,086
$79,639$79,639
$67,314$67,314
$27,812$27,812
$378,600$378,600
HAS HAS == 378,600 / 60 378,600 / 60 == $6,310 per month $6,310 per month
Avg.Avg. SalarySalary
$6,567$6,567
$6,565$6,565
$6,591$6,591
$6,636$6,636
$5,609$5,609
$5,562$5,562
$6,310$6,310
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Retirement SeminarRetirement Seminar
2004-029 MPP 2006.10.20 NRA60
Pension Formula ExamplePension Formula Example
Plan member and spouse are both 54Plan member and spouse are both 54
Retirement dateRetirement date December 31December 31
Pension effective datePension effective date January 1January 1
Pensionable servicePensionable service 28 years28 years
Contributory serviceContributory service 29 years29 years
HASHAS $6,310$6,310
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Retirement SeminarRetirement Seminar
2004-029 MPP 2006.10.20 NRA60
Pension Formula ExamplePension Formula Example
Basic monthly pension to age 65 Basic monthly pension to age 65
2%2% x x $6,310 $6,310 xx 28 28 == $3,537 $3,537
Minus the bridge benefitMinus the bridge benefit
0.7% 0.7% xx $3,642 (YMPE) $3,642 (YMPE) xx 28 28 == $714 $714
For a lifetime pension after age 65 of $2,823 per monthFor a lifetime pension after age 65 of $2,823 per month
Age: 54 Age + Contributory Service = 83 Age: 54 Age + Contributory Service = 83
NO REDUCTIONNO REDUCTION
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Retirement SeminarRetirement Seminar
2004-029 MPP 2006.10.20 NRA60
Special Agreement ContributionsSpecial Agreement Contributions
• What are they?What are they?
• How are they treated at retirement?How are they treated at retirement?
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Retirement SeminarRetirement Seminar
2004-029 MPP 2006.10.20 NRA60
Special Agreement ContributionsSpecial Agreement Contributions
• Simple calculations allow you to estimate the Simple calculations allow you to estimate the increase to your pension that special increase to your pension that special agreement contributions will makeagreement contributions will make
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Retirement SeminarRetirement Seminar
2004-029 MPP 2006.10.20 NRA60
Subtract your age in years and months Subtract your age in years and months from your retirement datefrom your retirement date
2007 122007 12 Retirement date (Dec 2007)Retirement date (Dec 2007)1953 121953 12 Date of birth (Dec 1953)Date of birth (Dec 1953)
54 054 0 AgeAge--
Special Agreement ContributionsSpecial Agreement Contributions
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Retirement SeminarRetirement Seminar
2004-029 MPP 2006.10.20 NRA60
Value of a Single Life Pension of $1 per monthValue of a Single Life Pension of $1 per monthfrom SA contributionsfrom SA contributions
Age
5051525354
555657585960
Factor212.5209.2205.7202.2198.6
194.9191.2187.3183.3179.3175.1
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Retirement SeminarRetirement Seminar
2004-029 MPP 2006.10.20 NRA60
Special Agreement ContributionsSpecial Agreement Contributions
Divide your SA contributions plus interest by the rate:Divide your SA contributions plus interest by the rate:
ExampleExample
Special agreement contributionsSpecial agreement contributions $55,012$55,012
Interest on SA contributionsInterest on SA contributions ++ $125,118$125,118
Total Total $180,130$180,130
$180,130 $180,130 198.6 198.6 == $907 extra per month for life with $907 extra per month for life with a single life pension.a single life pension.
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Retirement SeminarRetirement Seminar
2004-029 MPP 2006.10.20 NRA60
Special Agreement ContributionsSpecial Agreement Contributions
Add this dollar figure to the single life pension Add this dollar figure to the single life pension amount calculated using the defined benefit amount calculated using the defined benefit formula. The total is then converted to the formula. The total is then converted to the various pension options.various pension options.
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Retirement SeminarRetirement Seminar
2004-029 MPP 2006.10.20 NRA60
Pension OptionsPension Options
• Single life no guaranteeSingle life no guarantee
• Single life guaranteed 5, 10 or 15 yearsSingle life guaranteed 5, 10 or 15 years
• 100% joint life100% joint life
• 60% joint life guaranteed 10 years60% joint life guaranteed 10 years
• Temporary annuity – can only be taken as part Temporary annuity – can only be taken as part of one of the above options—seek financial of one of the above options—seek financial advice before electingadvice before electing
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Single life pension Single life pension
guaranteed 10 yearsguaranteed 10 years
Single life pension Single life pension
guaranteed 15 yearsguaranteed 15 years
100% joint life + 100% joint life +
temporary annuitytemporary annuity
100% joint life 100% joint life
pensionpension
60% joint life 60% joint life
guaranteed 10 yearsguaranteed 10 years
Single life guaranteed Single life guaranteed
5 yrs. + temp. annuity5 yrs. + temp. annuity
11
22
33
55
66
77
44
Temp. Temp.
AnnuityAnnuityPension Pension
after 65after 65Pension Pension
to age 65to age 65
Bridge Bridge
BenefitBenefitBasic Basic
PensionPensionOptionOption Monthly Pension Monthly Pension
OptionOption
Survivor’s Survivor’s
PensionPension
$3,283$3,283$714$714 $1,541$1,541
$3,435$3,435$490$490$714$714 $2,231$2,231
$3,781$3,781$490$490$714$714
$3,477$3,477$714$714
$3,153$3,153$714$714 $2,439$2,439
$2,569$2,569
$2,231$2,231
$2,577$2,577
$2,763$2,763
$2,439$2,439
$2,799$2,799 $3,513$3,513$714$714
Single life pension Single life pension
guaranteed 5 yearsguaranteed 5 years$3,531$3,531$714$714$2,817$2,817 $2,817$2,817
$2,569$2,569
$2,231$2,231
$2,577$2,577
$2,763$2,763
$2,439$2,439
$2,799$2,799
Single life pension Single life pension
no guaranteeno guarantee$3,537$3,537$714$714$2,823$2,823 $2,823$2,823
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Sample Pension OptionsSample Pension OptionsNot Including Special Agreement Balance Not Including Special Agreement Balance
((Entitled to pension and transfer of Special Agreement balance - $180,130)Entitled to pension and transfer of Special Agreement balance - $180,130)
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2004-029 MPP 2007.08.31 NRA60
Single life pension Single life pension
guaranteed 10 yearsguaranteed 10 years
Single life pension Single life pension
guaranteed 15 yearsguaranteed 15 years
100% joint life + 100% joint life +
temporary annuitytemporary annuity
100% joint life 100% joint life
pensionpension
60% joint life 60% joint life
guaranteed 10 yearsguaranteed 10 years
Single life guaranteed Single life guaranteed
5 yrs. + temp. annuity5 yrs. + temp. annuity
11
22
33
55
66
77
44
Temp. Temp.
AnnuityAnnuityPension Pension
after 65after 65Pension Pension
to age 65to age 65
Bridge Bridge
BenefitBenefitBasic Basic
PensionPensionOptionOption Monthly Pension Monthly Pension
OptionOption
Survivor’s Survivor’s
PensionPension
$4,109$4,109$714$714 $2,037$2,037
$4,219$4,219$490$490$714$714 $3,015$3,015
$4,687$4,687$490$490$714$714
$4,366$4,366$714$714
$3,937$3,937$714$714 $3,223$3,223
$3,395$3,395
$3,015$3,015
$3,483$3,483
$3,652$3,652
$3,223$3,223
$3,699$3,699 $4,413$4,413$714$714
Single life pension Single life pension
guaranteed 5 yearsguaranteed 5 years$4,437$4,437$714$714$3,723$3,723 $3,723$3,723
$3,395$3,395
$3,015$3,015
$3,483$3,483
$3,652$3,652
$3,223$3,223
$3,699$3,699
Single life pension Single life pension
no guaranteeno guarantee$4,,444$4,,444$714$714$3,730$3,730 $3,730$3,730
88
Sample Pension OptionsSample Pension OptionsIncluding Special Agreement BalanceIncluding Special Agreement Balance
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2004-029 MPP 2007.08.31 NRA60
Gross Retirement Income by AgeGross Retirement Income by Age
6060 6565RetirementRetirement
Lifetime PensionLifetime Pension
Bridge BenefitBridge Benefit Old Age SecurityOld Age Security
Canada Canada Pension PlanPension Plan
Canada Canada Pension PlanPension Plan
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2004-029 MPP 2007.08.31 NRA60
Gross Retirement Income by AgeGross Retirement Income by Age– – With Temporary Annuity –With Temporary Annuity –
6060 6565RetirementRetirement
Lifetime Pension Lifetime Pension (reduced forever by temporary annuity)(reduced forever by temporary annuity)
Bridge BenefitBridge Benefit Old Age SecurityOld Age Security
Canada Canada Pension PlanPension Plan
Canada Canada Pension PlanPension Plan
Temporary AnnuityTemporary Annuity
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Retirement SeminarRetirement Seminar
2004-029 MPP 2006.10.20 NRA60
What should I think about when What should I think about when selecting my Pension Option?selecting my Pension Option?
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Retirement SeminarRetirement Seminar
2004-029 MPP 2006.10.20 NRA60
Life TablesLife Tables
Age
50
55
60
Male
81.97
82.50
83.18
Female
86.37
86.66
87.05
MPP Life
Male
79.23
79.89
80.75
Female
83.70
84.14
84.77
BC LifeCanadian Life
Male
78.26
78.91
79.81
Female
82.94
83.40
84.06
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Retirement SeminarRetirement Seminar
2004-029 MPP 2006.10.20 NRA60
Other Factors That Affect Your PensionOther Factors That Affect Your Pension
• Whether you have a spouse or former Whether you have a spouse or former spouse with an entitlement to part of your spouse with an entitlement to part of your pensionpension
• When you elect to commence your pensionWhen you elect to commence your pension
• Increasing pensionable service by Increasing pensionable service by purchasing servicepurchasing service
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Retirement SeminarRetirement Seminar
2004-029 MPP 2006.10.20 NRA60
Definition of SpouseDefinition of Spouse
• The person you are legally married to and, for the The person you are legally married to and, for the two-year period immediately before the relevant time two-year period immediately before the relevant time (e.g., retirement or death), were not living separate (e.g., retirement or death), were not living separate from; or, if this does not apply,from; or, if this does not apply,
• The person, of the same or opposite sex, who has The person, of the same or opposite sex, who has lived with you in a marriage-like relationship for the lived with you in a marriage-like relationship for the two-year period immediately before the relevant time.two-year period immediately before the relevant time.
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Retirement SeminarRetirement Seminar
2004-029 MPP 2006.10.20 NRA60
Marital BreakdownMarital Breakdown
• We are required to administer a pension in We are required to administer a pension in accordance with any separation agreement, accordance with any separation agreement, court order or application for division of pensioncourt order or application for division of pension
• We can split the pension benefits at the sourceWe can split the pension benefits at the source
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Retirement SeminarRetirement Seminar
2004-029 MPP 2006.10.20 NRA60
Deferred PensionDeferred Pension
• Vested plan members can leave work before age Vested plan members can leave work before age 50 and defer their pensions to age 50 or older50 and defer their pensions to age 50 or older
• Seek professional advice if you plan to defer your Seek professional advice if you plan to defer your pension beyond earliest eligibilitypension beyond earliest eligibility
• Your highest average salary is indexed at the same Your highest average salary is indexed at the same rate as the indexing granted to pensioners each rate as the indexing granted to pensioners each JanuaryJanuary
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Retirement SeminarRetirement Seminar
2004-029 MPP 2006.10.20 NRA60
Your Pension – Take It At 50 or Defer to Age 55?Your Pension – Take It At 50 or Defer to Age 55?
If you terminate employment at age 50If you terminate employment at age 50
Monthly pension income at 50Monthly pension income at 50 $3,000$3,000
Total payments from age 50 to 55Total payments from age 50 to 55 $180,000$180,000
Unreduced pension deferred to 55Unreduced pension deferred to 55 $3,500$3,500
Increase to pensionIncrease to pension $500$500
Make-up time ($180,000 Make-up time ($180,000 ÷ ÷ $500) $500) == 360 months, or 360 months, or 30 years30 years
Age at break-even pointAge at break-even point 858535
Retirement SeminarRetirement Seminar
2004-029 MPP 2006.10.20 NRA60
Disability Pension ProvisionsDisability Pension Provisions
If you are not eligible for LTD benefits, you may be eligible If you are not eligible for LTD benefits, you may be eligible for a disability pension provided you:for a disability pension provided you:
• terminate employmentterminate employment
• are under age 55 are under age 55
• have at least two years of contributory service, and have at least two years of contributory service, and
• are unable to fill any position your employer can are unable to fill any position your employer can reasonably offerreasonably offer
There is a two-year limit from the date of last contribution There is a two-year limit from the date of last contribution or service credit to applyor service credit to apply
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Retirement SeminarRetirement Seminar
2004-029 MPP 2006.10.20 NRA60
Death Before RetirementDeath Before Retirement
Vested with no spouse: Vested with no spouse: commuted value (CV) payment commuted value (CV) payment to nominated beneficiary or estateto nominated beneficiary or estate
Vested with spouse: Vested with spouse:
• If member dies before 50, immediate pension or CV If member dies before 50, immediate pension or CV
• If member dies at 50 or older, immediate pension paid. If member dies at 50 or older, immediate pension paid. SA portion can be taken as a pension or CV.SA portion can be taken as a pension or CV.
Not vested: Not vested: contributions plus interest paid to spouse, contributions plus interest paid to spouse, nominated beneficiary or estatenominated beneficiary or estate
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Retirement SeminarRetirement Seminar
2004-029 MPP 2006.10.20 NRA60
Purchasing ServicePurchasing Service
• Rules for calculating most purchase types have Rules for calculating most purchase types have been simplifiedbeen simplified
• Online purchase estimator available at Online purchase estimator available at mpp.pensionsbc.campp.pensionsbc.ca
• Your employer must complete your purchase Your employer must complete your purchase applicationapplication
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Retirement SeminarRetirement Seminar
2004-029 MPP 2006.10.20 NRA60
Purchasing ServicePurchasing Service
• Increases your pension benefit and may reduce Increases your pension benefit and may reduce any early retirement reductionany early retirement reduction
• May increase the subsidy for health benefitsMay increase the subsidy for health benefits
• You can pay by cheque or RRSP transfer, as You can pay by cheque or RRSP transfer, as determined by CRAdetermined by CRA
• Purchases must be made within applicable time Purchases must be made within applicable time lineslines
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Retirement SeminarRetirement Seminar
2004-029 MPP 2006.10.20 NRA60
• Arrears Arrears – should have contributed, but did not– should have contributed, but did not
• Leave of absence Leave of absence – partial or unpaid leave – partial or unpaid leave
• Non-contributoryNon-contributory – did not contribute – did not contribute
• Reinstate a refundReinstate a refund – repay funds withdrawn from – repay funds withdrawn from the plan, plus interestthe plan, plus interest
Purchasing Service – TypesPurchasing Service – Types
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Retirement SeminarRetirement Seminar
2004-029 MPP 2006.10.20 NRA60
For most purchases, the costing method is For most purchases, the costing method is the same (arrears, leaves, non-contributory)the same (arrears, leaves, non-contributory)
CurrentCurrentMonthly Monthly Full-time Full-time SalarySalary
Current Employer Current Employer and Employee and Employee
Contribution RatesContribution Ratesxx
Purchasing Service – CostPurchasing Service – Cost
Number of Number of Months to be Months to be PurchasedPurchased
xx
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Retirement SeminarRetirement Seminar
2004-029 MPP 2006.10.20 NRA60
Purchasing Service – DeadlinesPurchasing Service – Deadlines
• You must be an active Municipal Pension You must be an active Municipal Pension Plan member to purchase service.Plan member to purchase service.
• There is a five year window of opportunity to There is a five year window of opportunity to purchase service. purchase service.
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Retirement SeminarRetirement Seminar
2004-029 MPP 2006.10.20 NRA60
Is It Worth Purchasing Service?Is It Worth Purchasing Service?
• Cost-benefit analysisCost-benefit analysis
• Divide cost by the increase to pension Divide cost by the increase to pension to get number of months to break evento get number of months to break even
• Tools: Tools: Purchase estimatorPurchase estimator Pension estimatorPension estimator
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Retirement SeminarRetirement Seminar
2004-029 MPP 2006.10.20 NRA60
Purchase Cost/Benefit ExamplePurchase Cost/Benefit Example
• Estimated cost to purchase three months of Estimated cost to purchase three months of service is $2,700 (based on current monthly service is $2,700 (based on current monthly salary of $6,000)salary of $6,000)
• Approximate increase to pension $30 per month Approximate increase to pension $30 per month to age 65, reducing to $24 per month at age 65to age 65, reducing to $24 per month at age 65
• $2700 $2700 ÷÷ $30 $30 == 90 months, or 7.5 years to regain 90 months, or 7.5 years to regain the costthe cost
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Retirement SeminarRetirement Seminar
2004-029 MPP 2006.10.20 NRA60
Child-rearing time – Contributory Service creditChild-rearing time – Contributory Service credit
• You may be able to count time at home raising a You may be able to count time at home raising a child as child as contributory servicecontributory service for eligibility for an for eligibility for an unreduced pensionunreduced pension
• You can apply for a maximum of five years in totalYou can apply for a maximum of five years in total
• Pensionable service must be credited before and Pensionable service must be credited before and after the child-rearing periodafter the child-rearing period
• There is no cost for child-rearing creditThere is no cost for child-rearing credit
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Retirement SeminarRetirement Seminar
2004-029 MPP 2006.10.20 NRA60
Portability means carrying certain pension rights from Portability means carrying certain pension rights from one pension plan to another. May include:one pension plan to another. May include:
• Public Sector Transfer AgreementPublic Sector Transfer Agreement
• Reciprocal agreements with some pension plans Reciprocal agreements with some pension plans in Canadain Canada
You must have left your contributions on deposit with You must have left your contributions on deposit with the prior plan, or reinstated service. Some agreements the prior plan, or reinstated service. Some agreements have application deadlines. Shortfalls in service are have application deadlines. Shortfalls in service are common with many reciprocal agreements.common with many reciprocal agreements.
PortabilityPortability
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Retirement SeminarRetirement Seminar
2004-029 MPP 2006.10.20 NRA60
Planning For RetirementPlanning For Retirement
• About a year before you plan to retire, estimate About a year before you plan to retire, estimate your pension online at your pension online at mpp.pensionsbc.campp.pensionsbc.ca, or , or
• Request a Retirement Planning Package from Request a Retirement Planning Package from us (also available online at us (also available online at mpp.pensionsbc.campp.pensionsbc.ca))
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Retirement SeminarRetirement Seminar
2004-029 MPP 2006.10.20 NRA60
Preparing To RetirePreparing To Retire
• Complete an Complete an Estimate RequestEstimate Request form form (available online) and return it to us(available online) and return it to us
• Request a Request a Pension EstimatePension Estimate by by telephonetelephone
• We will send you a We will send you a Retirement Retirement Application PackageApplication Package
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Retirement SeminarRetirement Seminar
2004-029 MPP 2006.10.20 NRA60
When actually retiring:When actually retiring:
• Complete and return the Complete and return the Retirement Retirement Application PackageApplication Package
• Enclose Enclose clear copiesclear copies of proof of age of proof of age documentsdocuments
Applying To RetireApplying To Retire
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Retirement SeminarRetirement Seminar
2004-029 MPP 2006.10.20 NRA60
Pension Effective DatePension Effective Date
Your pension is effective the latest of:Your pension is effective the latest of:
• first day of the month following eligibilityfirst day of the month following eligibility
• first day of the month following your final paid dayfirst day of the month following your final paid day
• first day of the month of applicationfirst day of the month of application
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Retirement SeminarRetirement Seminar
2004-029 MPP 2006.10.20 NRA60
Finalize Your PensionFinalize Your Pension
• You will receive a letter stating the exact amount of your You will receive a letter stating the exact amount of your monthly pension monthly pension
• You have 60 days to change your pension option You have 60 days to change your pension option (you must notify us in writing); otherwise, it cannot (you must notify us in writing); otherwise, it cannot be changedbe changed
• We will notify you when your pension amount changes We will notify you when your pension amount changes (income tax changes, indexing, etc.)(income tax changes, indexing, etc.)
• Notify Municipal Pension Services in writing if Notify Municipal Pension Services in writing if you moveyou move
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Retirement SeminarRetirement Seminar
2004-029 MPP 2006.10.20 NRA60
After RetirementAfter Retirement
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Retirement SeminarRetirement Seminar
2004-029 MPP 2006.10.20 NRA60
IndexingIndexing
• Effective January 1 following start of the pensionEffective January 1 following start of the pension
• Pro-rated for pensions in effect less than one yearPro-rated for pensions in effect less than one year
Indexing is not guaranteedIndexing is not guaranteed
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Retirement SeminarRetirement Seminar
2004-029 MPP 2006.10.20 NRA60
Medical, Extended Health and Dental BenefitsMedical, Extended Health and Dental Benefits
BC Medical Services Plan (MSP)BC Medical Services Plan (MSP)
• Basic medical insuranceBasic medical insurance
Pacific Blue CrossPacific Blue Cross
• Extended health benefits (EHB) planExtended health benefits (EHB) plan
• Dental benefits planDental benefits plan
Group benefit coverage is not guaranteedGroup benefit coverage is not guaranteed
54
Retirement SeminarRetirement Seminar
2004-029 MPP 2006.10.20 NRA60
• You must be a Canadian residentYou must be a Canadian resident
• Coverage can include spouse and dependantsCoverage can include spouse and dependants
• BC residents may enrol in MSP at any timeBC residents may enrol in MSP at any time
• You may enrol in the EHB/dental plans at retirement You may enrol in the EHB/dental plans at retirement or later, if you can prove continuous, comparable or later, if you can prove continuous, comparable coveragecoverage
• Premiums are normally deducted from your pensionPremiums are normally deducted from your pension
Medical, Extended Health and Dental BenefitsMedical, Extended Health and Dental Benefits
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Re-employment of a Retired MemberRe-employment of a Retired Member
Contact us if you become re-employed with an Contact us if you become re-employed with an MPP employer. You can:MPP employer. You can:
• Continue to receive your pension, in which Continue to receive your pension, in which case you are not eligible to contribute, orcase you are not eligible to contribute, or
• Stop receiving your pension and begin Stop receiving your pension and begin accruing service, oraccruing service, or
• Stop receiving your pension, repay your Stop receiving your pension, repay your pension plus interest, and begin accruing pension plus interest, and begin accruing serviceservice
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Federal Pension PlansFederal Pension Plans
• Canada Pension PlanCanada Pension Plan
• Old Age Security Old Age Security
Apply six months before you want to start Apply six months before you want to start collecting either of these benefits by calling collecting either of these benefits by calling
1 800 277-99141 800 277-9914
or visit or visit
www.servicecanada.gc.cawww.servicecanada.gc.ca
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Retirement SeminarRetirement Seminar
2004-029 MPP 2006.10.20 NRA60
Canada Pension PlanCanada Pension Plan
• Contributions paid by employees and employersContributions paid by employees and employers
• Normal age for retirement benefits is 65, even if Normal age for retirement benefits is 65, even if you are still at work you are still at work
• Reduced pension benefits available as early as Reduced pension benefits available as early as age 60, subject to criteria being metage 60, subject to criteria being met
Reduction 6% a year to a maximum of 30%Reduction 6% a year to a maximum of 30%
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Canada Pension Plan – Take It or Leave It?Canada Pension Plan – Take It or Leave It?
Age when CPP payments beginAge when CPP payments begin 60 years60 years
% of CPP at age 65 % of CPP at age 65 ($863.75)($863.75) 70%70%
Monthly CPP incomeMonthly CPP income $605$605
ReductionReduction $259$259
Total payments from age 60 to 65Total payments from age 60 to 65 $36,300$36,300
Make-up time ($36,300 Make-up time ($36,300 ÷ ÷ $259) $259) == 140 months, or 140 months, or 11.7 years11.7 years
Age at break even pointAge at break even point 77 years77 years
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2004-029 MPP 2006.10.20 NRA60
Old Age SecurityOld Age Security
• Residency requirements must be satisfiedResidency requirements must be satisfied
• Payable at age 65Payable at age 65
• Taxed back if income exceeds a certain amountTaxed back if income exceeds a certain amount
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Municipal Pension Retirees Association (MPRA)Municipal Pension Retirees Association (MPRA)
• voice concerns to the Municipal Pension Board on behalf of retirees
• belong to a support group
• share your skills, knowledge and experience
• stay in touch with colleagues
• make new friends
An association for retired municipal, health and education employees and their spouses to:
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• Complete the application enclosed with the Complete the application enclosed with the retirement confirmation letterretirement confirmation letter
• Membership fees can be deducted from Membership fees can be deducted from your pension paymentyour pension payment
Municipal Pension Retirees Association (MPRA)Municipal Pension Retirees Association (MPRA)
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Thank you for attendingThank you for attending
Please complete the evaluation Please complete the evaluation form because your feedback is form because your feedback is
important to usimportant to us
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2004-029 MPP 2006.10.20 NRA60
Contact InformationContact Information
Municipal Pension PlanMunicipal Pension PlanPO Box 9460PO Box 9460Victoria BC V8W 9V8Victoria BC V8W 9V8
VictoriaVictoria 250 953-3000250 953-3000Lower Mainland Lower Mainland 604 660-5366 604 660-5366Toll-free in BC Toll-free in BC 1 800 668-63351 800 668-6335Fax Fax 250 953-0421250 953-0421WebsiteWebsite mpp.pensionsbc.campp.pensionsbc.caE-mailE-mail [email protected] [email protected]
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