tpp.pensionsbc.ca Site Map
Teachers Pension Plan Banner

My Account

Register Now

Problems logging on?

Member
My Account
New Member
Mid Career
Near Retirement
Forms
Investment Info
Resources
Publications
News
FAQ on
Links
Plan Governance
StraightTalk
Contact
Retired Members
Employer
Pension Corporation
BCIMC

Teachers' > FAQ > Plan Design FAQ

Plan Design Changes Frequently Asked Questions

What is happening?
What are the rules for pensionable service on and after January 1, 2018?
What will this mean to me?
Please explain the differences between the current rules and the rules in effect on and after January 1, 2018.
When will I be able to see the effects of plan design changes on my pension?
Will I be able to calculate my pension with the changes? When will I be able to calculate my pension with the changes?
Why is this change happening?
Is the plan healthy?
Will my pension benefits be affected by proposed changes to the Canada Pension Plan?
What is happening to the bridge benefit?
How is the rule of 90 affected?
How will purchasing service be affected? Will the cost of purchasing service be calculated differently for pre-2018 and post-2017 service?
I have 35 years of service. Will I have to contribute again starting January 1, 2018?
I have 35 years of service. What if I don’t want to contribute again?
I have 35 years of service and will have to contribute again starting January 1, 2018. Can I purchase the time between my last contribution and 2018?
I taught in Alberta between 1974 and 1995 and elected to transfer my Alberta Teachers’ Retirement Fund benefit to BC’s Teachers’ Pension Plan at retirement. Will changes to the plan affect me?
I just got my 2016 Member’s Benefit Statement. It shows that the date I can retire with an unreduced pension is later than what it said in previous statements. I thought the plan redesign was supposed to make me better off. What happened?
What if I have general questions or concerns about changes to the plan?

 

If You Are an Employer

How will this affect my reporting?
I have members who have reached the 35-year contribution cap who will have to recontribute on January 1, 2018. How will this affect me?
How do I get more information?
Will this cost the employer anything?
What if I have general questions or concerns about changes to the plan?

If You Are Retired

How will this affect me?

 

What is happening?

The Teachers’ Pension Board of Trustees has accepted proposed changes to the Teachers’ Pension Plan from the plan partners—the British Columbia Teachers’ Federation and the provincial government.

The changes mean your pension at retirement will be based on two sets of rules: those in effect before January 1, 2018, and those in effect on and after January 1, 2018.

What are the rules for pensionable service on and after January 1, 2018?

For pensionable service earned on or after January 1, 2018,

  • You will contribute a flat percentage of salary of 12.92. Employers will contribute a flat percentage of salary of 13.23.

  • You will earn a 1.85 per cent flat accrual rate and be able to earn more than 35 years of pensionable service. This means if you have 35 years of pensionable service, you’ll start contributing again on January 1, 2018.

  • You will be able to receive an unreduced pension
    • at age 61 if you have at least two years of contributory service, or
    • between the ages of 55 and 60 if you have at least 35 years of contributory service.

  • If you retire before age 61 with fewer than 35 years of contributory service, your pension will be reduced 4.5 per cent for every year you’re younger than 61, providing you have at least two years of contributory service.

  • If you retire before age 65 with fewer than two years of contributory service, your pension will be reduced 4.5 per cent for every year you are younger than 65.

  • The rule of 90 (unreduced early retirement if your age plus years of contributory service equal at least 90) will be removed for post-2017 accruals. All contributory service earned on or after January 1, 2018, will still count toward the rule of 90 to determine the reduction on the benefit earned before 2018.

  • Service earned on or after January 1, 2018, will count toward rule of 90 eligibility for service earned before 2018.

For all pensionable service before January 1, 2018, the bridge benefit will apply. The bridge benefit is a temporary benefit paid to retired members up to age 65 or death, whichever comes first. For service on or after January 1, 2018, the bridge benefit will not apply.

Your pension at retirement will be based on two sets of rules: those in effect before January 1, 2018, and those in effect on and after January 1, 2018.

Regardless of your retirement date, the benefit for all service earned before January 1, 2018, will remain unchanged.

back to top

What will this mean to me?

If you contribute on or after January 1, 2018, your benefits for service on or after January 1, 2018, will be affected by the plan design change. All benefits for service accrued before January 1, 2018, will be unaffected.

Your pension at retirement will be based on two sets of rules: those in effect before January 1, 2018, and those in effect on and after January 1, 2018.

If you retire before January 1, 2018, the change will not affect you.

back to top

Please explain the differences between the current rules and the rules in effect on and after January 1, 2018

  1. Five-year highest average salary
  2. The YMPE is a salary amount set by the federal government each year for the purposes of determining the maximum annual contribution to the Canada Pension Plan. For 2016, the YMPE is $54,900.
  For pensionable service earned on or after January 1, 2018 For pensionable service earned on or before December 31, 2017

Eligibility for unreduced pension

Age 55 up to age 61 if you have at least 35 years of contributory service

Age 61 up to age 65 if you have at least two years of contributory service

Age 65 with no minimum contributory service requirement

Age 55 up to age 59 and your age plus years of contributory service totals at least 90 years (known as the rule of 90)

Age 60 up to age 64 with two or more years of contributory service

Age 65 or older.

Reduced pension

If you retire before age 61 with fewer than 35 years of contributory service, your pension will be reduced 4.5% for every year you are younger than 61, providing you have at least two years of contributory service

If you retire before age 65 with fewer than two years of contributory service, your pension will be reduced 4.5% for every year you are younger than 65

If you are at least age 55 and you retire before age 60 with 10 or more years of pensionable service (and you have 20 or more months of contributory service, or 10 or more months of pensionable service in the 24 months immediately before your termination date), your pension will be reduced by the lesser of two calculations:
• 3% per year for every year under age 60, or
• 3% per year for every year your age plus contributory service is less than 90 (both to a maximum reduction of 15%)

If you do not meet the above criteria, your pension will be reduced by the lesser of two calculations:
• 5% per year for every year under age 60, or
• 5% per year for every year your age plus contributory service is less than 90 (both to a maximum reduction of 25%)

If you are at least age 55 but under 60 and you retire before you have two years of contributory service, your pension will be reduced by 5% per year for every year under age 65 (to a maximum reduction of 50%)

If you terminate employment after age 60 and before age 65 with fewer than two years of contributory service, your pension will be reduced 5% per year for every year under age 65 (to a maximum reduction of 25%)

Member contribution rate

12.92% of salary

12.50% of your salary up to and including the year’s maximum pensionable earnings (YMPE)*

14.00% of your salary above the YMPE

Employer contribution rate

13.23% of salary

12.81% of your salary up to and including the year’s maximum pensionable earnings (YMPE)

14.31% of your salary above the YMPE

Maximum years of pensionable service

No maximum

35

Rule of 90

Does not apply (contributory service earned on or after January 1, 2018, will still count toward the rule of 90 to determine the reduction on the pre-2018 benefit)

Applies

Bridge benefit

Does not apply

Applies

*The year’s maximum pensionable earnings (YMPE) is a salary amount set by the federal government each year to determine the maximum annual contributions to the Canada Pension Plan. For 2016, the YMPE is $54,900.

back to top

When will I be able to see the effects of plan design changes on my pension?

Starting this fall, the website will include general scenarios showing typical plan members and how plan design changes affect their pension. This will help you better understand the effect of plan design changes on your own pension.

In spring 2017, we’ll be able to provide pension estimates that take into account the plan rule changes. As part of this, you’ll be able to go online and use your personal information, such as salary and expected retirement date, to calculate your own expected pension.

On June 2017, you’ll receive a Member’s Benefit Statement. This statement will be updated to take into account the effects of plan design changes, including your estimated lifetime monthly pension and bridge benefit payments on retirement.

back to top

Will I be able to calculate my pension with the changes? When will I be able to calculate my pension with the changes?

The online pension estimator is accurate for any estimates with a retirement date before January 1, 2018. For estimates with a retirement date on or after January 1, 2018, the estimate will not be accurate.

We are updating our calculators to consider plan design changes. We aim to have them ready by early March 2017. Before this date, we will put scenarios on the plan website to show how plan design changes may affect members differently, depending on their age, service and earnings.

back to top

Why is this change happening?

Plan design changes will make the plan more equitable for all members, regardless of retirement age, earnings or work experience.

  • Plan design changes will ensure members pay the same contribution rate, regardless of their salary, for the same benefit accrual.

  • An increased lifetime benefit will replace the bridge benefit for service earned on or after January 1, 2018; this is more equitable for members, regardless of retirement age.

These changes also modernize the plan:

  • The changes respond to a changing work environment where teachers may spend a considerable portion of their early career in part-time work.

  • The plan needs to adapt to reflect these shifts.

The plan is fully funded and continues to be sustainable.

back to top

Is the plan healthy?

Yes. The plan is fully funded and continues to be sustainable. The plan design changes will make the plan more equitable for all members and modernize the plan.

back to top

Will my pension benefits be affected by proposed changes to the Canada Pension Plan?

Any proposed Canada Pension Plan (CPP) changes will come into effect after plan design changes. Any pension benefits you accrue after January 1, 2018, will be unaffected by any changes to the CPP.

back to top

What is happening to the bridge benefit?

The bridge benefit will continue to apply for all service before January 1, 2018. For service on or after January 1, 2018, an increased lifetime benefit will replace the bridge benefit.

Your pension at retirement will be based on two sets of rules: those in effect before January 1, 2018, and those in effect on and after January 1, 2018.

For example, if a member retires at age 57 and has five years of pensionable service before January 1, 2018, and 15 years of pensionable service on and after January 1, 2018, only the five years of pensionable service earned before 2018 will be considered when calculating the bridge benefit. The 15 years earned on and after January 1, 2018, will not be considered when calculating the benefit.

back to top

How is the rule of 90 affected?

The rule of 90 states that members receive an unreduced early retirement if their age plus years of contributory service equal at least 90.

The rule of 90 will continue to apply to your pre-2018 benefit.

All contributory service earned on or after January 1, 2018, will count toward the rule of 90 (unreduced early retirement if your age plus years of contributory service equal at least 90). If you meet the rule of 90, only the benefit for service before 2018 will be unreduced.

For example, if a member is age 59 and has 10 years of contributory service before January 1, 2018, and 21 years of contributory service on and after January 1, 2018, and together they meet the rule of 90 before retirement, only the pension calculation for the 10 years of contributory service earned before 2018 will be unreduced. The pension calculation for the 21 years of contributory service earned on or after January 1, 2018, will be reduced by 9.0 per cent (4.5 per cent for each year the member is under age 61).

back to top

How will purchasing service be affected? Will the cost of purchasing service be calculated differently for pre-2018 and post-2017 service?

There is no change to how purchasing service for a leave of absence will be calculated.

The cost of purchasing service is based on the length of the leave period, your full-time equivalent salary and your contribution rate at the time you apply to purchase service following your leave. Contribution rates are changing on January 1, 2018, meaning applications to purchase service on or after that date will use the new contribution rate.

For details on purchasing service for a leave of absence and calculating the cost of purchasing service, read PensionFacts Purchasing leaves of absence.

back to top

I have 35 years of service. Will I have to contribute again starting January 1, 2018?

Yes. On January 1, 2018, the 35-year cap on service will be removed. This means you will have to start contributing again to the plan on this date. An exception to this would be retired members with 35 years of pensionable service who retire with a pension before January 1, 2018, and return to work on or after January 1, 2018. In these cases, the members would not recontribute to the plan.

back to top

I have 35 years of service. What if I don’t want to contribute again?

There is no “opt-out” provision. All members, regardless of service, will contribute a flat percentage of 12.92 starting January 1, 2018.

back to top

I have 35 years of service and will have to contribute again starting January 1, 2018. Can I purchase the time between my last contribution and 2018?

You will not be permitted to purchase pre-2018 service where you were employed but did not contribute because of the 35-year cap.

back to top

I taught in Alberta between 1974 and 1995 and elected to transfer my Alberta Teachers’ Retirement Fund benefit to BC’s Teachers’ Pension Plan at retirement. Will changes to the plan affect me?

Changes to the plan starting in 2018 may affect this benefit. Please contact the plan for more information.

back to top

I just got my 2016 Member’s Benefit Statement. It shows that the date I can retire with an unreduced pension is later than what it said in previous statements. I thought the plan redesign was supposed to make me better off. What happened?

For the vast majority of members, the new rules will provide a better lifetime pension. This better lifetime pension, which replaces the bridge benefit for service earned on and after January 1, 2018, is more equitable for members, regardless of retirement age, earnings or work experience.

Though the age of eligibility for an unreduced pension has increased by at least one year for most members, the redesign means that these members will still get a larger lifetime pension—even if they retire at the old unreduced age.

For instance, consider a member with the following circumstances:

  • Highest average salary: $81,000 (the average for the plan)
  • Years of service: 31
  • Age at retirement: 59

Under the old rules, this member would retire with an unreduced annual pension of $38,306. Under the new rules (assuming half the member’s service took place on or after January 1, 2018), the member would retire with a reduced annual pension of $40,289. Thus, even after applying the reduction, their lifetime pension would improve by just under $2,000 per year.

View a sample Member’s Benefit Statement with explanations about the effect of plan redesign.

back to top

What if I have general questions or concerns about changes to the plan?

If you are a member of the Teachers’ Pension Plan and have questions about how changes to the plan may affect your pension, contact the plan directly.

Phone
Toll-free in Canada and U.S. 1 800 665-6770
Victoria 250 953-3022

Mailing address
Teachers’ Pension Plan PO Box 9460 Victoria, BC V8W 9V8

Email
Contact the Teachers’ Pension Plan

Fax
250 356-8977

Location
2995 Jutland Road
Victoria BC

Office hours
Monday–Friday
8:00 a.m.–4:30 p.m.

If you are a plan member and have board-related concerns or questions about why the plan design changes are being made, contact the board through Teachers’ Pension Board Secretariat.

Phone
Rest of BC 1 800 663-8823
Victoria 250 387-8200

Mailing address
Teachers’ Pension Board Secretariat
Pension Corporation
PO Box 9460
Victoria BC V8W 9V8

Email
TPBT@pensionsbc.ca

Fax
250 387-4199

Location
395 Waterfront Crescent
Victoria BC

Office hours
Monday–Friday
8:00 a.m.–4:30 p.m.

back to top

 

If You Are an Employer

How will this affect my reporting?

Plan rule changes mean you will need to update your system to calculate the same contribution rates for salaries above and below the year’s maximum pensionable earnings (YMPE) amount.

The removal of the 35-year service cap means contributions from members with more than 35 years of service will have to be collected and reported.

Further information will be provided in the Employer Instruction Manual and the employer newsletter.

back to top

I have members who have reached the 35-year contribution cap who will have to recontribute on January 1, 2018. How will this affect me?

Starting January 1, 2018, you will need to start deducting employee contributions for these members as you would for any other members. These deductions must be included on your monthly remittances to BC Pension Corporation.

How do I get more information?

Starting this fall, we’ll be posting information on the plan’s website and in the employer newsletter. In addition, further information will be provided in the Employer Instruction Manual.

back to top

Will this cost the employer anything?

Plan design changes are cost-neutral to the plan in aggregate.

In the aggregate, there is no additional contribution cost to employers or members in the plan because of plan design changes.

back to top

What if I have general questions or concerns about changes to the plan?

Message Board

If you represent an employer in the Teachers’ Pension Plan and have questions about the administration of the new plan design changes, contact Employer Operations directly:

Phone
Toll-free in Canada and U.S. 1 855 356-9701
Victoria 250 356-9701

Mailing address
Employer Operations
Teachers’ Pension Plan
PO Box 9460
Victoria, BC V8W 9V8

Email
Employer.Services@pensionsbc.ca

Fax
250 356-1784

Location
2995 Jutland Road
Victoria BC

Office hours
Monday–Friday
8:00 a.m.–4:30 p.m.

 

If You Are Retired

How will this affect me?

It won’t—there will be no effect on your pension.

Plan design changes will help ensure more equitable benefits for future contributors.

The plan is fully funded and continues to be sustainable.

back to top

Top  |  Copyright  |  Disclaimer  |  Privacy  |  Help