||Volume 20, Number
1, September 2007
Teachers' Pension Plan
The deadline to purchase historical service (i.e., leaves that ended before April 1, 2002) has now come and gone. What are the conditions and deadlines to purchase service now? This article is intended to give a brief summary and update on purchasing service.
When you take an approved full-time leave of absence from your school district, you do not accumulate either pensionable service or contributory service. If you take a part-time leave, then you do not accumulate pensionable service.
If you purchase a leave period, you will receive the pensionable service, and if applicable, the contributory service, that you would have received had you not taken the leave.
What can be purchased?
In order to maximize your pension benefit, the following types of employer-approved leaves of absence can be purchased through the Teachers Pension Plan:
- General Leave (up to 5 cumulative years)taken for any reason other than those listed below.
- Maternity Leave (up to 17 weeks)may only be purchased by birth mother.
- Parental Leave (up to 35 weeks)may be purchased by birth mothers, fathers, and adoptive parents.
- Compassionate Care Leave (up to 8 weeks, considered part of general leave accumulation)taken to provide care and support to a family member in situations where the family member is gravely ill with a significant risk of death within 26 weeks.
- Non-contributory time (considered part of general leave accumulation)time while on recall list, with application to purchase made before recall rights expire.
Conditions and deadline for purchase
- You were an active member when you took the leave.
- The leave ended on or after April 1, 2002.
- You must apply to purchase your leave within five years of the date the leave ended.
- You must apply to purchase the entire leave period, unless the purchase makes your service exceed 35 years in total or 10 months in a calendar year, in which case you may be able to purchase a portion of the leave.
- You must apply to purchase before you end your employment with your current employer. If you do not plan to return to work after the leave (e.g., you may be heading straight into retirement or going to another school district to live/work), you can purchase the time, providing you apply while you are still on the leave.
- Your employer must certify your leave by signing the Purchase of Service Application form, which can be downloaded from the "Forms" area on the Teachers Pension Plan home page at tpp.pensionsbc.ca.
Cost of purchase
Calculating the cost of purchasing a leave of absence has been simplified, as follows: your current full-time-equivalent salary times the applicable contribution rate times the number of months of service being purchased.
The current employee contribution rate is 9.16%. The current employer contribution rate is 12.29%.
The member only has to pay her or his share when purchasing maternity, parental, and/or compassionate care leaves. The member has to pay both the current employee and the current employer rates for a combined total of 21.45% on salary that is under the YMPE when purchasing general leaves and time on the layoff/recall list.
- Example 1: full-time general leave, taken September 1, 2004 to June 30, 2005; monthly salary $6,500. The cost is $6,500 x 21.45% x 10 months = $13,943.
- Example 2: full-time maternity and parental leave, taken September 1, 2004 to June 30, 2005, monthly salary $6,500. The cost is $6,500 x 9.16% x 10 months = $5,954. The employer is billed its share of the cost to purchase.
The Teachers Pension Plan online Purchase Cost Estimator is available to help you determine the cost of purchasing service. The cost estimate can be printed and used as your purchase of service application form. Your employer must sign this form.
Calculating the cost benefit
Use the Teachers Pension Plan online "My Account" Personalized Pension Estimator and calculate your pension for a specific retirement date. Then go back and increase the pensionable service and contributory service by the additional amount being purchased and recalculate your pension for the same retirement date. This will give you the increase in your monthly pension due to the purchase. Divide the cost of the purchase by the increase in the monthly pension to determine the number of months of increased pension it will take to recover your purchase cost. If the time is 10 years or less, the purchase may be to your benefit.
Check out the information on Purchase of Service on the "Pensions" page on the BCTF web site at bctf.ca.
You may also contact BCTF Income Security staff for assistance. Telephone: 1-800-663-9163 (toll-free), 604-871-1921 (Vancouver).
E-mail: firstname.lastname@example.org or email@example.com.
Join the RTA
Some of the most valued benefits of membership in the BC Retired Teachers Association are its insurance plans. Competitive, affordable, and comprehensive, they are designed to meet the needs of retired educators, and include home insurance, long-term care insurance, life insurance and legacy planning, and travel insurance. All feature group rates based on a population of preferred clientele.
The travel insurance, MEDOC, is especially attractive to people in their new-found freedom to traveloff-season, when the price is right. A "golden umbrella" that accompanies members worry-free around the world, it provides out-of-province emergency medical coverage and trip cancellation/interruption/delay insurance. Applicants are not restricted because of age or pre-existing medical conditions, and those who subscribe to MEDOC attest to its excellent service.
Joining the BCRTA means belonging to an organization that exists to "guard the interests and to promote the welfare" of retired educators throughout BC.
Call the office 604-871-2260 or toll free 1-877-683-2243, and check the web site for more information: www.bctf.ca/rta/.
Two seminars"Your Pension, Your Future" and "Thinking About Retiring" are being offered in these areas for 200708.
Preregistration is required; the time and location will be confirmed by e-mail or by mail. The forms are available at tpp.pensionsbc.ca.
Thursday and Friday seminars are 5:00 p.m. to 6:30 p.m. and Saturday seminars are 9:00 a.m. to 10:30 a.m.
|Oct. 11||Richmond||Feb. 7||Vancouver|
|Oct. 13||Richmond||Feb. 8||Vancouver|
|Oct. 25||Williams Lake||Feb. 9||Vancouver|
|Oct. 26||Prince George||Feb. 14||Vernon|
|Oct. 27||Prince George||Feb. 16||Penticton|
|Nov. 8||Victoria||Mar. 6||Burnaby|
|Nov. 15||Kamloops||Mar. 8||Burnaby|
|Nov. 17||Kamloops||Mar. 29||Fort St. John|
|Nov. 24||Coquitlam||Apr. 3||Nanaimo|
|Dec. 1||Kelowna||Apr. 5||Nanaimo|
|Jan. 10||Abbotsford||Apr. 19||Prince Rupert|
|Jan. 12||Abbotsford||May 3||Castlegar|
|Jan. 17||Surrey||May 8||Delta|
|Jan. 18||Surrey||May 10||North Vancouver|
|Jan. 24||Campbell River|
For more information, contact: Teachers Pension Plan, Seminar Services, Box 9460, Victoria, BC V8W 9V8, Toll free 1-877-558-5574, Fax: 250-953-0436, E-mail TPPseminars@pensionsbc.ca
Theres more to it than money
The BC Retired Teachers Association is offering workshops for those about to retire. These workshops will follow and complement those presented by the BCTF/ Pension Plan held around the province, but will be limited to fewer than 30 participants.
After you attend a pension seminar, you will realize there is more to it than money and who better to share their expertise with you than retired teachers?
Retirement living brings with life-altering situations and a wide variety of choices, some financial, some legal, and all to do with lifestyle. Achieving a workable balance when teaching days are over, and making retirement fulfill dreams doesnt just happen.
A pension seminar is coming to your area. Ask your local to contact the BCRTA (604-871-2260/2) to book the free follow-up workshop.