You can’t eat a rose
The BCTF quest for pension security
by Linda Watson, Vice-Chair, Teachers’ Pension Board, retired teacher
Eloise Johnson smiled, fondly surveying her one-room schoolhouse on her last day on the job. After 43 years of service to her small, rural community, Eloise was retiring. She loved teaching, but at her age it was getting harder to get through the day. Eloise headed out to the tea being held in her honour in the garden of the chair of the town's school board.
Walking back to her rooming house with her lovely bouquet of flowers, she was quite excited. After all, this was June of 1922. Eloise knew that in 1921, the Civil Servants' Pension Act had been amended to allow school boards to offer pensions to their retiring employees. With the consent of the local town council, a pension would be granted. The town council requirement was a last-minute amendment to the legislation while it was in the House. This worried Eloise a bit, but surely her many years of service would be rewarded.
Eagerly, Eloise awaited news of her pension being granted. Alas, the school board and the municipal council took no action, and no motion was passed for a pension. Eloise's experience was repeated around the province. Not a single teacher received a pension under the legislation of 1921.
One of the finest achievements of the BCTF over its history has been its advocacy and stewardship of pensions for BC teachers. Your teacher pension is likely to be your biggest financial asset. It will keep you out of poverty in your senior years. Your employer is required to contribute at least as much as you do in support of your pension. Since 2001, your defined benefit pension plan is jointly controlled by teachers and government, a rarity in Canada, and is required to be fully funded.
Teacher Magazine, Volume 29, No. 2, January/February 2017
The BCTF path to pensions
1919 BCTF officially began its quest for pensions with a Special General Meeting motion asking the provincial government to introduce a Superannuation Fund for teachers.
1921 Civil Servants' Pension Act was amended allowing school boards to offer pensions to retiring employees. Boards had to match teachers' contributions themselves, with no financial help from the province.
1923 A B.C. Teacher letter lamented, “It is indeed a sorry reflection on the vaunted educational process of the province that the few pioneers that will stay with the teaching profession are destined to end their lives in penury.”
1924 Teachers were expected to work as long as they could. Once they became ill, they had to rely on their savings, which given the low salaries were virtually impossible to accumulate, then their family members, then charities in the community like the Salvation Army or the church. The following illustrates why the BCTF advocated for retirement security: Taken ill in the middle of her 37th year of teaching, this teacher could not finish the school year. There was no sick leave, so she received no salary. Her meagre savings were quickly depleted with medical expenses. That June, she appealed to the school board for “some small annual gratuity.” The school board refused, so she approached the provincial government. It, too, refused her request, saying that pensions were a local matter. That year the Education Department records listed eleven similar cases.
1927 BC Legislature approved a $6,000 fund to provide a retiring allowance to teachers who were unable to continue in the classroom. A few older teachers received modest allowances from this fund. BCTF efforts in this era were supported by the provincial Labour party and by the Trades and Labour Congress.
1929 B.C. Teachers' Pension Act passed. Teachers contributed 4% of their salary. They could receive a pension of $25 per year for each year of service, to a maximum pension of $750 a year. A small annuity was added from the teacher's own contributions.
1940 The Plan failed because of underfunding-pensions were reduced by about one-third during the war years.
1941 A new Teachers' Pension Act set contributions at 3% of salary up to $100 a month, and 4% on salary over that amount. The teachers contributed twice as much as government.
1961 Significant changes to the pension formula were made, basing the pension on years of service, age at retirement, and final average salary-features that continue to this day.
1966 Canada Pension Plan established. The Teachers' Pension Plan was integrated with it.
1969 BCTF lobbied government in 1969 and 1970, asking for significant changes, including increases to the pensions of retired teachers.
1971 Government increased pension benefits for active teachers, changing the average salary calculation from 10 years to 7 years, and approving a “90” factor if age 60 or more to reduce the penalty for early retirement. They increased government contributions by
10% to $548 per teacher annually.
However, only a very small increase was provided for retired teachers. This prompted the first province-wide teacher strike in BC history, a one-day strike on March 19, 1971, to support retirees. The strike did not result in immediate improvements for retired teachers, but it demonstrated the resolve and unity of the BCTF, and it laid the groundwork for the pension changes implemented after a change in government.
1974 NDP government agreed to match teachers' contributions to the plan for the first time. Government and BCTF increased contributions by 1% to provide for indexing and a one-time adjustment to existing pensions.
1975 Indexing was guaranteed and applied quarterly based on the change in the Consumer Price Index.
1980 Government Inflation Adjustment Account made indexing as a contingent benefit-cost-of-living increases would be provided annually if there was sufficient money.
1981 Superannuation Commission established an Investment Committee that included BCTF representation.
1992 The pension eligibility or “vesting” was reduced from 10-years service to 5 years. (Note: immediate vesting is now in effect.)
1993 Member contributions terminated after 35 years of pensionable service.
1994 TPP began providing subsidies for retiree health benefits based on years of pensionable service. The plan paid 100% of premiums for MSP, extended health, and dental (1995) plans for retirees with 10+ years of service. Pension Advisory Board was established with three reps each from BCTF and government but Cabinet made the appointments and controlled the rules.
1996 Plan allowed up to five years of child rearing credit for contributory service, and expanded the right of teachers to purchase service for leaves of absence.
2000 The NDP government negotiated to move the four public sector pension plans (Teachers', College, Municipal, and Public Service) from statutory plans to Joint Trusteeship. In a referendum, BCTF members voted 87%, BCRTA voted 100% , BCPVPA voted 92%, and the BCSSA voted 96%, all in favour.
2001 The Joint Trust began with decision-making authority equally shared between government and the BCTF. Purchase of service rules were simplified and pensionable service calculations became more flexible. Members benefitted from a more direct appeal process. The Pension Board advocated for responsible investment practices.
2005 Membership in the pension plan became mandatory for all employees, ensuring that everyone earns pension credit from day one of employment.
2010 Since cost-of-living increases remain a contingent benefit, the Pension Board moved to protect the Inflation Adjustment Account (IAA) by ending the subsidies for health benefits, directing that money into the inflation account. AGM voted to have active members pay an additional 1% into the IAA. Retirees have access to health benefits but must pay 100% costs.
2015 A province-wide consultation of plan members was undertaken by the BCTF.
2016 The AGM approved changes that will come into effect on January 1, 2018, modernizing the plan, improving equity, and delinking it from CPP, protecting members from future changes in the Canada Pension Plan. With these design reforms and the power of the Joint Trust, your pension plan and the BCTF are poised to safeguard retirement income security for BC's teachers for another 100 years.
improvements were made to the pension by increasing the rate of pension growth,
improving the value of the default pension calculation called the “normal
form”, and increasing the funding of the IAA.