Today the Public Service Pension Plan (PSPP) Board of Trustees has announced a landmark change to the plan design of the PSPP. The BCGEU has a long history of negotiating and advocating for pensions for our members in all sectors. Over the last few years, the BCGEU, as the Plan Partner representative for the PSPP, has engaged the Government Partner on potential plan design improvements. It has been our intent to enhance benefits while increasing equity within the plan, thereby improving its design for the benefit of plan members.
We are very proud to report to members of the PSPP that we have been successful in achieving design changes that will significantly increase lifetime pensions for the vast majority of our members. Members with pensionable service (you were working and contributing to the PSPP between April 1, 2006 and March 31, 2018) will see a lift in their future lifetime pension based on earnings below the yearly maximum pensionable earning (YMPE - $55,900 in 2018). The calculation for those years will be 22.2% higher-a rate of 1.65% rather than the current 1.35%.
After April 1, 2018, the calculation for all earnings will be set at 1.85%. For those with maximum earnings below the YMPE, this represents a 37% increase to their lifetime pension benefit calculation for each year of future service going forward.
Existing rights, such as past service earned-which applies to current early retirement options such as the rule of 85-are vested and you will retain those entitlements when you eventually retire. Following the changes, members with 35 years of contributory service will still be able to retire as early as age 55 without any reduction in those benefits. Service after the effective date (April 1, 2018) will be calculated at the new flat rate of 1.85%. When you retire, your pension will be a combination of the three formulas.
These changes will not immediately apply to Corrections officers, due to their public safety designation and the need to consider their earlier retirement options. The BCGEU is actively consulting with the Pension Corporation on specifics regarding changes in plan design for this group.
The move to a flat rate of accrual, combined with the retroactive improvement to the below-YMPE accrual from 2006, represents a substantial improvement over the existing plan design. It is also not without precedent: the Teachers and College plans have already moved to a flat rate of accrual, although without the retroactive provision we have secured for the Public Service plan members.
We encourage you to go to the PSPP website link at www.pspp.pensionsbc.ca for details and further information that is available now. Should you have any questions we encourage you to contact the administrator at 1-800-665-3554.