The Public Service Pension Board of Trustees — which includes trustees appointed by the Government of British Columbia and the B.C. Government and Service Employees’ Union — is making changes to ensure the Public Service Pension Plan (PSPP) meets its obligations under the federal Income Tax Act (ITA), and to strengthen the sustainability of inflation protection.
There is no reduction in funding to the PSPP, but some funding which is diverted to Post Retirement Group Benefits (PRGB) will go to the Inflation Adjustment Account (IAA).
Protecting the IAA for current and future retired members is a priority for the plan partners and the board. Unlike basic pension benefits, future inflation adjustments are not guaranteed.
Some of the employer contributions that are currently being used to subsidize PRGB will be redirected to strengthen the funding available for inflation adjustments as per the partners’ agreement.
Limiting the funding of PRGB to one per cent of salary means changes will have to be made to PRGB programs. Effective April 1, 2012, changes to the plan will include:
The trustees have worked to ensure every member receives the same value of coverage for extended health care, and believe the changes are an equitable approach to addressing this challenge.
Similar action has been taken by other major pension plans in BC.
To learn more about the Public Service Pension Plan and Benefits changes: