Chair – Harpinder Sandhu
The next Public Service Pension Plan Advisory Committee meeting will be held in three weeks on May 21st, 2014.
The Conference Board of Canada has released a detailed study late 2013 outlining the economic benefits of our public pension plans in BC. The conclusions of the report include:
- Two main impacts such as Higher lifetime savings and lower management expenses utilizing the BC Investment Management Corporation retaining our investment management services. The savings impact results in $1.28B in higher provincial income. The impact of BCIMC reinvesting in BC results in an additional $750 million per annum to the provincial economy.
To read the report please visit our Pensionsbc.ca website and click on the “Straight Talk” section.
The recent communication from the PSPP on April 02, 2014 for our Pension Plan members includes the following notice:
Rule clarification: protecting members’ pension rights when
they are involuntarily transferred between employers
Public Service Pension Plan (plan) members are sometimes moved between
employers within the same pension plan because of workforce restructuring
Effective December 10, 2013, the plan rules have been amended to
provide clarity for members and employers in cases of involuntary transfer.
The plan rule amendments are designed to ensure that participation
in the plan continues uninterrupted for any member whose employment
situation has changed due to an involuntary transfer. Specifically, the
amendments provide for:
• continued purchase-of-service rights,
• continued purchase payment obligations for the new employer, and
• the new employer’s use of a member’s year-to-date salaries to determine
when to use the contribution rates above the year’s maximum
pensionable earnings (YMPE).
What does this mean for employers and plan members?
Purchasing leaves of absence and non-contributory service
The rule amendment clarifies that members being involuntarily transferred
to a new employer continue to have the ability to purchase leaves of absence
and non-contributory periods within the five-year purchase window.
There is no requirement for a member to apply to purchase arrears before
leaving the employer with which the arrears period occurred. Because
of this, the rule clarification does not impact the current rules for
purchasing arrears.pspp.pensionsbc.ca 2007-022 ERB135 PSPP 2014.03.24
Use of year-to-date salaries
Employers will be required to use the members’ year-to-date salaries to
determine when to use the employee contribution rates above and below the
YMPE. This is because members have different contribution rates for salaries
above and below the YMPE and using existing year-to-date salaries (when an
involuntary transfer occurs) ensures the plan receives the correct amount of contributions during the year of transition.
We will be updating the Instructions for Employers with the new information. Please contact the PSPP if you have further questions.