BCGEU members in the Municipal Pension Plan will see an extra 0.7 per cent of their salary automatically deducted for pension contributions as of this date. Employers will contribute the same increased amount.
If you are a BCGEU Community Social Service worker (component 3) or a Community Health worker (Component 4, 8), you may be in the Municipal Pension Plan. Some BCGEU members in the Education, Scientific, Technical and Administrative Component (Component 7) and General Services members (Component 17) may also be in the Municipal Pension Plan.
Despite the short-term pain of a contribution rate increase, you should know that the Municipal Pension Plan continues to provide excellent value and unmatched retirement income certainty.
The Municipal Pension Plan will likely become an important source of your retirement income. Pension benefits are designed to help ensure an adequate retirement income when combined with Canada Pension Plan benefits and other potential sources of retirement income.
For every one dollar you contribute today, you will receive up to eight dollars in retirement. The amount you will be paid by the pension plan in retirement is guaranteed and predictable, unlike an RRSP or other financial instruments.
In short, a pension is a paycheque for life.
With over $30 billion in assets, the Municipal Pension Plan is healthy because the Plan addresses any funding shortfall in a timely manner via a contribution rate increase. It is the sixth largest defined benefit pension plan in Canada, and remains 96.5% funded.
Last year, the Plan did an actuarial valuation that determined that there were some unfunded liabilities. This is in large part due to lower investment returns following the 2008 economic downturn. Periodic contribution increases are implemented to ensure the pension plan’s long-term health.
The Municipal Pension Plan is well funded, affordable and sustainable. Unlike most of the US and other Canadian provinces, BC’s public sector pension plans are pre-funded. Pre-funding means that each generation pays for its own retirement benefits.
Your pension savings are safe and growing, even if you need to contribute a bit more every month.
And don’t forget - your pension is guaranteed retirement income for as long as you live.
BCGEU Members in Component 3 – Community Social Services participate in a variety of retirement arrangements. Most eligible workers elected to join the Municipal Pension Plan effective April 1, 2010.
The majority of members in Component 4 and 8, specifically those in the facilities, community health and health science professional sectors, are participants in the Municipal Pension Plan. Some members are "grandparented" in the Public Service Pension Plan.
BCGEU members in other sectors may be in the Municipal Pension Plan, including in the Education, Scientific, Technical and Administrative Component (Component 7) and General Services members (Component 17).
Remember: Municipal Pension Plan members who joined on or after April 1, 2010 may be eligible to purchase past pensionable service with their employer, thereby increasing their guaranteed retirement income. If you are considering purchasing past service, you will save costs if you complete your purchase before July 1, 2014, when the contribution rate increase kicks in.