Board Communique: November 22, 2021
Valuation surplus is good news for members
Member News: Pensions improve for correctional employees starting April 1, 2022
In January 2021, the board announced that the 2020 valuation determined the plan is fully funded with surplus funds of $2.7 billion. The board has decided to use the surplus funds to make a number of improvements to the plan.
Here are the improvements for correctional employees in BCGEU Component 1, effective April 1, 2022.
Contribution rate structure
The contribution rate structure will be reintegrated with the year’s maximum pensionable earnings, or YMPE, set by the federal government. Your total contribution rate will change from a flat rate of 8.35 per cent to:
- 8.25 per cent up to YMPE, and
- 8.95 per cent over YMPE.
What this means: You will see a difference on your paycheque in the first pay period after April 1, 2022.
Improved pension accrual rate
Your pension is calculated based on a formula. Part of that formula is the accrual rate, the rate at which you build up your pension benefits. Starting on April 1, 2022, your pension accrual rate will increase from 1.35 per cent to 1.60 per cent on earnings up to the YMPE. Your accrual rate on earnings above the YMPE (2.00 per cent) and your bridge benefit accrual rate (0.65 per cent) remain the same.
What this means: You will earn more pension on service earned on and after April 1, 2022. This will increase your lifetime pension.
Table of recent changes
The contribution rates and accrual rates in effect at the time you earn service remain tied to that service. This means you could have multiple service periods as part your pension calculation. The table below summarizes the accrual rates and contributions since April 1, 2018.
|April 1, 2018 to July 31, 2018||August 1, 2018 to March 31, 2022||NEW: April 1, 2022 going forward|
|Member pension contribution rate1||7.93% up to YMPE2
9.43% over YMPE
|8.35% flat rate||8.25% under YMPE
8.95% over YMPE
|Lifetime pension accrual rate||1.35% up to YMPE
2.00% over YMPE
|1.35% up to YMPE
2.00% over YMPE
|1.60% up to YMPE
2.00% over YMPE
|Bridge benefit accrual rate||0.65% up to YMPE||0.65% up to YMPE||0.65% up to YMPE|
1 Total contribution rate includes both basic and inflation adjustment account contributions.
Learn how these changes affect you: use the personalized pension estimator in My Account to see how the new contribution rates and new below YMPE accrual rate will be applied to your future pension. Starting on November 22, 2021, the new accrual rate will be applied to estimated service for retirement dates calculated on and after May 1, 2022.
Refunds to members
Service earned between August 1, 2018 and March 31, 2022, had a flat contribution rate of 8.35 per cent. Correctional employees will receive a refund of 0.35 per cent of salary for salary earned between August 1, 2018 and March 31, 2022. Your employer will receive a refund as well.
What this means: You will be refunded 0.35 per cent of salary for your overcontributions made between August 1, 2018 and March 31, 2022. Your refund will be issued by cheque after the plan’s fiscal year-end reporting is complete, between May and October 2022.
Preparing for the future
Importantly, the board has set aside $1.1 billion of the valuation surplus for the plan’s rate stabilization account. If a future valuation determines the plan needs a contribution rate increase, the board will use the funds from the rate stabilization account to lessen the effect on members and employers.
Join us: webinar on pension improvements for correctional employees
The plan will host two webinars for correctional employees in January 2022. These webinars will cover your pension improvements as well as general information about your pension plan. There will be an opportunity to ask questions.
Registration information will be posted on the plan website in mid-December.