Teachers' pensions – a brief history
The spring 1973 session of the legislature made several significant improvements to the Teachers’ Pensions Act. The gross differences between the pensions of long-service and short-service teachers were reduced; the averaging period was reduced from seven to five years; vesting was granted after 10 years; portability was extended to include all B.C. government-managed pension plans; discrimination between the rights of widows and widowers was removed; and the government agreed to increase its contributions to the pensions fund.
Legislation in the spring of 1974 and 1975 resulted in several pensions improvements. Among the major ones were: escalation of pensions in line with increases in the Consumer Price Index, pensions of 2% times years of service (maximum 70% pension at or after age 55 for teachers with 35 years service, retirement between age 55 and 60 with reduced pensions for teachers with 10-34 years of service (escalation effective at age 60), government matching of teachers’ contributions beginning in 1975.
1994 amendments incorporated a “90” formula for age plus years of service and reduced the early retirement penalty from 5% to 3% per year.
Pensions – Members’ Guide
Prepared by Bruce Watson, July 13, 2002
Plan members and the employer both agreed in 1974 to an additional contribution of up to 1% each to make a one-time adjustment to pensions in payment from 1972 to 1975 and to provide on-going inflation protection. Commencing in 1975 all past and future pensions would be adjusted quarterly by the changes in the Canadian Consumer Price Index. In addition the final average salaries of plan members on long term disability and those with vested pensions would be increased to date of retirement by the same index.
In 1981 the 1% contribution for indexing was allocated to the Inflation Adjustment Account. The quarterly indexing of pensions ceased and was replaced by an annual increase, not to exceed the Canadian Consumer Price Index, and within the available funds in the Inflation Adjustment Account.
The government agreed at this time to create an Investment Committee, with BCTF representation, to hear reports from the Ministry of Finance and to give input to the investment of the pension fund.
Changes to teachers’ pension benefits are on-going: lowering the vesting period from 10 to 2 years; basing pension eligibility on the “90” factor; lessening the reduction for early retirement; indexing the CPP offset; making available to retirees the Medical Services Plan of BC, an Extended Health Benefit plan and a Dental plan with the cost sharing dependent upon pensionable service; recognizing child-rearing years for pension eligibility; simplifying and broadening purchase of service rules.
In 1992 the Teachers’ Pension Plan Advisory Committee (TPPAC) was formed to create a committee to represent the interests of all pension plan members—members of the BCTF, the Principals’ and Vice-Principals’ Association, the BC School Superintendents’ Association and the retired members of the plan.
Full maturity in the pension plan was attained when the BCTF as Plan Member Partner and the Minister of Finance as the Plan Employer Partner signed an agreement to implement joint trusteeship of the Teachers’ Pension Plan. Under the Agreement, effective 5 April 2001, the Teachers’ Pension Board of Trustees ( 5 appointees from each partner) is responsible for managing the pension plan and the pension fund. Two crown corporations, the BC Pension Corporation and the BC Investment Management Corporation, are delegated the responsibility, respectively, for the day to day administration of the plan and the investment of the funds.